Comhlámh > CETA > How CETAS ICS would work > Law Firms Urging Covid-19 ICS Cases

Law Firms Urging Covid-19 ICS Cases

This short report provides references to show how the text of CETA would empower ‘investors’ to use the “notorious ISDS” of the World Bank to sue European government for the Covid-19 measures we took to protect human health.               

By Barry Finnegan [barry.finnegan@griffith.ie], June 4th, 2020.

=> CETA allows for the use of the old World Bank “notorious ISDS” system called the ICSID

=> Law firms are gearing up for what they call the, “Coming Wave of COVID-19 Arbitration” 

=> The text of CETA explicitly allows for cases to be taken at the World Bank’s unreformed ICSID 

=> Will the Irish Green Party take a stand and commit to voting ‘No’ on CETA in the next Dáil?

=> Global civil society is calling on governments to avoid these attacks on our health

=> Economics and human rights experts are calling for a moratorium on all ISDS cases

=> Mounting research demonstrates how corporations intend to use the ISDS of the likes of CETA

Law firms are right now advising corporations on potential ISDS claims in what one firm calls, “the Coming Wave of COVID-19 Arbitration”. See for example how the law firms Shoosmiths,  Alston & Bird and ReedSmith are encouraging their clients to take ISDS cases relating to the Covid-19 measures implemented by governments. 

Law firm, Shoosmiths, for example, are saying to their clients: “If you have reason to believe that your host State has breached its obligations under the BIT [the Bilateral Investment Treaty such as CETA with its ISDS], then you may be entitled to seek redress. You can bring an arbitration claim against the State and pursue it through an appropriate forum, e.g. the International Centre for the Settlement of Investment Disputes (“ICSID”)”.

At the same time, economics and human rights experts from around the world are now calling for a moratorium on all ISDS cases and approvals in this time of Covid-19.

Where will the Irish Green Party stand on the ISDS and CETA at this crucial juncture for our health and our democracy?

The ‘Investor Court System’ (ICS) proposal from the European Commission and legally approved by the EU’s Court of Justice, is an aspirational component of the CETA. The terms ‘court system’ and ‘investor court system’ do not appear anywhere in the text of the CETA, and the agreement still explicitly allows for use of the old World Bank ISDS system.

The 1,454 pages of the CETA trade and investment protection agreement can be downloaded from this EU weblink: http://data.consilium.europa.eu/doc/document/ST-10973-2016-INIT/en/pdf

Despite the fact that the ex-President of the European Commission, Jean-Claude Juncker, said that the Investment Court System (ICS) is “an innovative approach that became the template for all EU investment negotiations, replacing the old investor-state dispute system, the notorious ISDS,” and despite the fact that in April 2019, the Court of Justice of the European Union delivered their legal Opinion, that “the mechanism for the resolution of disputes between investors and States provided for by the free trade agreement between the EU and Canada (CETA) is compatible with EU law”, there is no mention of an ICS in the text of CETA, and the agreement still explicitly allows for use of the old unreformed World Bank ISDS system called the ICSID (International Centre for Settlement of Investment Disputes). 

The ‘Investment’ chapter of CETA, CHAPTER EIGHT, begins on page 76; its ‘SECTION F’, the ‘Resolution of investment disputes between investors and states’ begins on page 106. It is important to remember that despite the desire of European Parliamentarians to ‘reform’ the ISDS of CETA and other EU investment protection deals, the text clearly states in ARTICLE 8.23, paragraph 2, under ‘Submission of a claim to the Tribunal’ that:

“A claim may be submitted under the following rules:

(a) the ICSID Convention and Rules of Procedure for Arbitration Proceedings;

(b) the ICSID Additional Facility Rules if the conditions for proceedings pursuant to paragraph (a) do not apply;

(c) the UNCITRAL Arbitration Rules; or

(d) any other rules on agreement of the disputing parties”.

So while section (d) above allows for the establishment of a new system, for example the Commission’s currently non-existent ICS which was approved by the European Court of Justice, sections (a) and (b) allow for the use of what the ex-President of the European Commission, Jean-Claude Juncker [see above], has called, “the notorious ISDS”, namely, the International Centre for Settlement of Investment Disputes (the ISCID), which is based in Washington DC, and is part of, and funded by, the World Bank Group.

Further Reading: 

Corporate Europe Observatory: ‘Cashing in on the pandemic: how lawyers are preparing to sue states over COVID-19 response measures’: https://corporateeurope.org/en/2020/05/cashing-pandemic-how-lawyers-are-preparing-sue-states-over-covid-19-response-measures

Transnational Institute: ‘Pandemic Profiteers: How Foreign Investors Could Make Billions From Crisis Measures’: https://longreads.tni.org/pandemic-profiteers/

Global Civil Society Letter To Governments on ISDS and COVID-19: ‘Sign the open letter to governments on ISDS and COVID-19’: http://s2bnetwork.org/sign-the-pen-letter-to-governments-on-isds-and-covid-19/