How many IIAs are there in the region? Which of their provisions are most invoked? What are the most costly awards and settlements? Who are the actors and what are the industries most involved? Click on the boxes below to find out.

Investor-State Disputes in LAC
AS OF MAY 2024
22
LAC STATES HAD BEEN SUBJECT TO
412
INVESTOR-STATE DISPUTES

Status and Outcomes of Disputes

59.47%

OF ALL DISPUTES IN LAC HAVE ALREADY BEEN FINALIZED (THEIR ARBITRAL PROCEEDINGS HAVE CONCLUDED OR THE DISPUTES HAVE BEEN SETTLED BY THE PARTIES)

ISDS is asymmetrical by design. States cannot initiate proceedings against investors nor, for the most part, successfully assert counterclaims on the merits. This results from the fact that obligations are typically only construed in relation to the State. In this way, States pay investors both as a result of an award or upon settlement, but not vice versa.

Of the 245 finalized disputes with an award, 92 (41%) cases have been decided in favor of investor and 97 (59%) in favor of state. Assuming that investors reap economic benefits from both awards and settlements, they have succeeded in 151 cases under ISDS in LAC, or the 61% of the times. And 39% in favor of States.
INVESTORS HAVE SOUGHT CLAIMS AGAINST LAC
STATES THAT COME TO ALMOST
IN TOTAL, COUNTING AWARDS AND SETTLEMENTS AMOUNTS,
LAC STATES HAVE BEEN ORDERED TO PAY

This last sum is 4 times the current health spending in Ecuador (USD 7.8 billion), close to almost 1/3 of Colombia’s 2022 national budget (USD 93 billion), and close to 1/2 of the total IMF bailout pledged to Argentina in 2018 (US$ 57 billion)

Argentina (65), Venezuela (63), Mexico (52), Peru (49) and Ecuador (34) have been the worst hit
THESE STATES HAVE RECEIVED

64%

OF ALL DISPUTES AND BORNE THE

95.5%

OF TOTAL AWARD AND SETTLEMENT COSTS IN LAC
In contrast, Brazil has not received a single case because its parliament decided not to ratify any of its IIAs

A Closer Look:

Since 1996, investors have sought recourse to ISDS in solving their differences with LAC countries. Investor-state disputes have been on the rise, with a boom taking place in 2003, largely due to the 2001 Argentinian financial crisis (20 of the 25 disputes of 2003 involve Argentina)

A large number of investors hail from countries in Europe, but the United States is the country from which most disputes have been initiated against LAC states
ALTOGETHER, COUNTRIES IN EUROPE AND IN NORTH AMERICA ACCOUNT FOR OVER

82%

OF ALL INVESTMENT CLAIMS IN THE REGION
POLICY BRIEF

Investment Regime Reform Alternatives


The escalation of disputes in recent years, the unpredictability of ISDS outcomes, the high dollar amount of awards and damages calculation, and the shift in claims from those that target direct takings to those challenging government regulation, on top of growing evidence of the disconnect between IIAs and FDI inflows, has led many to rethink the current approach to international investment ordering. In this Policy Brief, CAROLA identifies potential alternatives to international investment reform and indicates mechanisms through which these reforms may be implemented.

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