ISDS – an Insidious Threat for the Uninterrupted Operation of Public Administration

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ISDS – an Insidious Threat for the Uninterrupted Operation of Public Administration

Journal Title: Chorzowskie Studia Polityczne - Year 2017, Vol 13, Issue

Abstract

The ISDS (Investor-State Dispute Settlement, also known as ICS – Investment Court System) is a contractual mechanism for the settlement of disputes between a foreign investor and a host country government. It allows an entrepreneur (an investor) to bring a case against a country (government) before a court of arbitration, should the country enact or use legislation adversely affecting the entrepreneur’s earnings (discriminatory practices). ISDS arbitrators are a group of over a dozen generously paid lawyers working for big international law firms who hardly ever rule in favor of the state. Under the ISDS, an entrepreneur can claim exorbitant damages over lost profits as well as compensation for expected profits, without even having to support the claim with strong evidence and detailed calculations. Importantly enough, domestic law systems do not provide for any judicial or administrative controls over this mechanism. The paper points out the dangers that the ISDS poses to governments and public administration, to the extent that it might impair a state’s legislative and administrative functions. This is because, fearing the financial consequences, civil servants might be tempted to dilute norms and standards or refrain from action in a number of key areas.

Authors and Affiliations

Krzysztof Załucki

Keywords

Investor-State Dispute Settlement investment agreements free trade international disputes public administration arbitration North American Free Trade Agreement (NAFTA) Comprehensive Economic and Trade Agreement (CETA) Transatlantic Trade and Investment Partnership (TTIP)

EP ID EP299959
DOI -
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