Investor-State Arbitration Tribunals

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Against DCF valuation in ISDS: on the inflation of awards and the need to rethink the calculation of compensation for the loss of future profits

One of the most noticeable facts in recent ISDS is the spectacular inflation of compensation awarded to investors. The overall increase in the amounts is well documented. Of the (now more than) 50 known awards in excess of USD 100 million, none was rendered before 2000 and only 11 before 2010. What is most attention-grabbing, however, are the dizzying multi-billion numbers reached in some extractive industry cases (e.g. $8.7 billion in ConocoPhillips v Venezuela, $6.6 billion in P&ID v Nigeria, $5.9 billion in Tethyan Copper v Pakistan). These awards have made headlines. More importantly, they impose an impossibly heavy burden on the finances of the States concerned. What explains this trend? The single most important factor is probably the now widespread use by tribunals of the DCF (discounted cash flows) valuation method to determine the value of the investment affected by the State’s breach. It consists of estimating the worth of a business as equal to the present value of the income it is expected to generate…

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Belgium asks European Court of Justice to opine on compatibility of Energy Charter Treaty’s investor-State arbitration provisions with EU law

On 3 December 2020, the Government of Belgium announced that it was submitting a request to the Court of Justice of the European Union for an opinion on ‘the compatibility of the intra-European application of the arbitration provisions of the future modernised Energy Charter Treaty with the European Treaties.’ This is major news, potentially sounding the death knell…

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To CETA or not to CETA: Reflections on ISDS and the special responsibility of national parliaments

In a reaction to an EJIL: Talk! post by Baetens et al., Arcuri et al. claim that the Dutch parliament has the right to reject CETA and also argue in favour of it doing so. The post by Arcuri et al. raises important points that merit further discussion, among legal academics and practitioners, politicians, and citizens.

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Expropriating democracy: on the right and legitimacy of not ratifying CETA

In May 2020, the unwinding saga in CETA’s ratification landed in a divided Dutch Senate. The date of the decisive vote in the Senate is dependent on the government’s response to questions raised by senators. Academics have suggested that the Netherlands should ratify CETA because not doing so ‘would be a very negative signal’ ‘in today’s crumbling…

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UNCITRAL and ISDS Reform (Online): Can You Hear Me Now?

‘Can you hear me now?’ is a question that the delegates of Working Group III asked each other often last week, as negotiations on ISDS reform continued but were, for the first time, online. Moving online means that negotiators are also facing many other new questions. How do you keep momentum going? Does moving online mean more governments and…

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