Investor-State Dispute Settlement, or ISDS, is one of the most hotly contested dossiers in the ongoing Transatlantic Trade & Investment Partnership (TTIP) negotiations. But for all the controversy, ISDS remains widely misunderstood. Here are a few things that may surprise you about ISDS.
1. ISDS was introduced by Germany in 1959
The first ISDS provision was included in a 1959 bilateral investment treaty between Germany and Pakistan, with the aim of protecting investors from unfair and unequitable treatment.
2. ISDS is a common provision in trade agreements
More than 3,000 international trade or investment agreements contain ISDS provisions, of which 1,400 were concluded by EU Member States and 50 by the United States.
3. ISDS is predominantly used by investors from the EU
Of the 608 known ISDS claims worldwide, 327, or more than 50%, have come from investors based in the EU.
4. Most claims filed against EU Member States are intra-EU disputes
Of the 128 claims against EU Member States, only 29 have originated from outside the EU, including 9 filed by US investors.
5. ISDS is accessible to investors of all sizes
Investors can be private companies, associations and even individuals. In fact, an OECD survey reveals that 22% of ISDS claimants are individuals and only 8% of the companies concerned are multinational corporations.
6. ISDS protects states
According to the International Centre for Settlement of Investment Disputes, 44% of ISDS cases were dismissed while a settlement was reached in 36% of cases. In only one of five cases did investors gain full or partial damages.
7. When damages are awarded in ISDS cases, the financial impact is limited
Studies about the financial impact of ISDS claims have found that the actual damages awarded are very small and only, on average, amount to 3-4% of total damages claimed.
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