TPP ISDS is rigged to advantage U.S.

Update: final text is out, just as rigged.


Wikileaks has released the “Investment Chapter” from the secret negotiations of the TPP (Trans-Pacific Partnership) agreement. It contains the highly controversial investor-to-state dispute settlement mechanism (ISDS), which makes it possible for multinational to sue states for international tribunals.

For a first analysis see Public Citizen.

I will point out one aspect of the TPP ISDS section: it is rigged to the advantage of the U.S.


The International Centre for Settlement of Investment Disputes (ICSID) is the most used ISDS forum. Investors can choose this forum: article II.18.3 (a) and (b) TPP ISDS text.

In practice the U.S. appoints the president of the World Bank. This president

– is ex officio chairman of the ICSID Administrative Council (article 5 ICSID),
– nominates the ICSID secretary-general (article 10 ICSID),
– appoints all three the arbitrators in annulment cases under ICSID rules (the only possible appeal, article 52.3 ICSID).

The TPP text mentions the possibility to request annulment in article II.28.8.a (i).

Already in 72 cases the president of the World Bank appointed all three the arbitrators. (press search) That is more than 10% of all known ISDS cases.

The secretary-general of ICSID

– appoints arbitrator(s) if parties fail to appoint one (TPP articles II.21.2, II.21.3, II.27.5),
– decides whether request for consolidation is manifestly unfounded (TPP article II.27.3),
– appoints the presiding arbitrator in consolidation (TPP article II.27.4).

Executive officials who have a link with the U.S. take and would take important decisions. This gives the U.S. an unfair advantage. And that is not all.

Exerting pressure

The U.S. could have lost the Loewen ISDS case. However, the U.S. won the Loewen ISDS case on a technicality.

After the Loewen ISDS case one of the tribunal members publicly conceded having met with officials of the U.S. Department of Justice (DoJ) prior to accepting his appointment. The DoJ put pressure on him.

The U.S. never lost an ISDS case.

Update: See also White House defends ISDS

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