ISDS in the Digital Age (Ginsburg's Monthly Article in Forbes)

The term “investor-state dispute settlement (ISDS)” is one of the most loaded phrases in international business.

For many, it is a pejorative that symbolizes corporate greed and infringement of national sovereignty. For others, it is a catalyst of foreign direct investment (FDI) that promotes technology transfer, creates jobs in host countries and enhances the productivity of companies around the world.

Regardless of where you stand on the ISDS debate, an investor’s right to bring a cause of action against host governments that breach international agreements is an indispensable political risk management tool. ISDS clauses are an essential part of bilateral investment treaties, which are agreements between two sovereign states that protect investments in the territory of the host country.