The Covid pandemic has led to debates on globalisation vis a vis protectionism. I have blogged about it here, here and here.
Now is the turn for ISDS and Covid to relate. Should ISDS avenues be available during the times of a pandemic? Should it be disallowed? Or should the arbitral tribunals decide if the arbitral claim is justified as per the provisions of the investment treaty?
Jeffrey D. Sachs and others have called for an immediate Moratorium on investor state dispute settlement cases during times of a pandemic like Covid as well as a permanent restriction on all arbitration claims related to government measures targeting health, economic, and social dimensions of the pandemic and its effects.
They call on States as well as international community to implement it. Well, it is more of an appeal. Would there be ISDS claims during such times? Are there any signs of it? Don't investment treaties have provisions to ensure that such claims are inadmissible or that allow governments to undertake such measures? What kind of measures can be covered? Does tightening of foreign direct investment screening measures also fall within the parameter of this moratorium. Can investment treaties be crafted in future to take care of such an eventuality?
Now is the turn for ISDS and Covid to relate. Should ISDS avenues be available during the times of a pandemic? Should it be disallowed? Or should the arbitral tribunals decide if the arbitral claim is justified as per the provisions of the investment treaty?
Jeffrey D. Sachs and others have called for an immediate Moratorium on investor state dispute settlement cases during times of a pandemic like Covid as well as a permanent restriction on all arbitration claims related to government measures targeting health, economic, and social dimensions of the pandemic and its effects.
These investor-state cases (often referred to as “ISDS” cases) empower foreign private companies to challenge government actions that affect narrow corporate interests, and often result in large payouts, sometimes of billions of dollars, to these companies for alleged lost profits. These suits pose an immediate danger to the ability of developing nations, and the global community as a whole, to confront the COVID-19 challenge.They give three primary reasons - Governments need to take measures that would impact businesses during epidemics (like lockdown measures or movement restrictions) which would impact profits; governments should not be distracted by arbitral claims during times of crisis and the arbitral awards could be substantial impacting government's ability to pay during times of crisis.
They call on States as well as international community to implement it. Well, it is more of an appeal. Would there be ISDS claims during such times? Are there any signs of it? Don't investment treaties have provisions to ensure that such claims are inadmissible or that allow governments to undertake such measures? What kind of measures can be covered? Does tightening of foreign direct investment screening measures also fall within the parameter of this moratorium. Can investment treaties be crafted in future to take care of such an eventuality?
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