What do we know?

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.

INTERNATIONAL
INVESTMENT
AGREEMENTS

INDUSTRIES
INVOLVED
IN DISPUTES

MOST COSTLY
AWARDS
& SETTLEMENTS

LEGAL PROVISIONS
INVOKED
IN DISPUTES

LAW FIRMS
ARBITRATORS
& ARBITRATOR CENTERS

Investor-State Disputes in LAC

AS OF NOVEMBER 2023

LAC STATES HAD BEEN SUBJECT TO

409

INVESTOR-STATE DISPUTES

Status and Outcomes of Disputes

1257

TOTAL NUMBER OF DISPUTES
IN THE WORLD

32.5%

OF DISPUTES WORLDWIDE
ARE IN LAC

62%

OF LAC STATES
ARE SUBJECT TO CLAIMS

64.1%

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 180 finalized disputes with an award, 87 (48.3%) cases have been decided in favor of investor and 87 (48.33%) in favor of state. Assuming that investors reap economic benefits from both awards and settlements, they have succeeded in 140 cases under ISDS in LAC, or the 62% of the times. And 38% in favor of States.

Chart indicating number of disputes settled, concluded, discontinued, and pending. Disputes settled and concluded are divided by those that favor states and investors

INVESTORS HAVE SOUGHT CLAIMS AGAINST LAC
STATES THAT COME TO ALMOST

USD 1,532 Billion

IN TOTAL, COUNTING AWARDS AND SETTLEMENTS AMOUNTS,
LAC STATES HAVE BEEN ORDERED TO PAY

USD 33.8 Billion

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, Venezuela, Peru, Mexico and Ecuador have been the worst hit

THESE STATES HAVE RECEIVED

63%

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)

Timeline of number of disputes per year in Latin America and the Caribbean from 1996 to 2019

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

Number of disputes according to state of the investor (top ten countries and continents)

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.

DOWNLOAD OUR POLICY BRIEF

Investment Regime Reform Alternatives Decorative Image

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INTERNATIONAL INVESTMENT DISPUTES

INTERNATIONAL INVESTMENT AGREEMENTS