Commentary: Govts’ COVID-19 response measures should not give rise to damages claims brought by foreign investors

Author: Corporate Europe Observatory & Transnational Institute, Published on: 3 June 2020

“Cashing in on the pandemic: How lawyers are preparing to sue states over COVID-19 response measures”, 19 May 2020

As governments take action to fight the COVID-19 pandemic and prevent economic collapse, big law firms are watching the virus too. Lawyers [are] urge big business to challenge emergency measures in order to defend their profits. In a parallel corporate justice system called ISDS, states could face multi-million dollar lawsuits…

[In Italy] lawyers pondered whether the… government’s “hastily drawn-up and ill-coordinated” measures to curb the spread of the virus and lessen its economic impact, “may well fall within the scope of... investment treaties... between Italy and other states, paving the way for damages claims brought by foreign investors against Italy.”…

Globally, thousands of trade and investment agreements give sweeping powers to foreign investors, including the… privilege to sue states in an arbitration court system known by the acronym ISDS (investor-state dispute settlement). [L]aw firms point their multinational clients to investment agreements’ vast protections for foreign investors as a tool to “seek relief and/or compensation for any losses resulting from state measures”…

[E]xperts have called for a permanent restriction on ISDS claims against government measures targeting the health, economic and social effects of the COVID-19 pandemic… There is no place for a parallel justice system for corporations…

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