Tuesday, June 23, 2020

ISDS and a pandemic - Not now please!

I had blogged about a call for an ISDS moratorium here in the context of the Covid pandemic. Jeffrey Sachs and James Bacchus have elaborated on this thought here:
There are four reasons for an immediate moratorium on new ISDS cases: 
First, the necessary business closures and other emergency responses will create unprecedented and far-reaching changes in the business environment and lead to lost income and profits. This requires widespread relief to companies and people. But ISDS provides special relief only for international investors, distorting support schemes and diverting governments’ attention from the needs of individuals and economic actors on the ground. 
Second, ISDS awards to investors from host governments frequently total many millions or even billions of dollars, which can represent sizable percentages of the budgets of developing countries. These legal penalties weigh heavily against the dire budget crises facing these developing countries in the context of the COVID-19 pandemic. The international arbitration community must ensure that ISDS does not deepen the inevitable fiscal crisis. 
Third, the mere threat of suits could chill the taking of crucial and timely regulatory or other governmental action. Governments must be able to fulfill their highest duty of protecting their citizens and halting the spread of the pandemic without fear of facing ISDS claims.  
Fourth, ISDS is not suitable as a remedy for addressing these claims, given the unprecedented nature of the crisis and the unprecedented scale and scope of public actions needed to address the crisis. There are no agreed international guidelines for how to proceed in these circumstances.  

The pillars of a NO - ISDS season during Covid:
1. Focus will shift to foreign investors instead of addressing local needs
2. ISDS claims can be debilitating for some governments - it runs into billions of dollars
3.Regulatory chill can be created - a devastating effect during times of crisis
4. Not suitable during emergencies such as pandemics

I am curious - Are there any claims during this period? Any ISDS disputes related to Covid in the offing? 

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