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Trade Deals Jurisdiction Hopping Not Acceptable

Friday, November 7, 2014

UK Firm Using Dispute Mechanism In Trade Pact To Bypass Argentina Courts Shows How EU Future Trade Deals Will Undermine UK Courts  Says GMB

BG were able to engage in “jurisdiction hopping” thereby bypassing the domestic courts to settle a contractual dispute in a sovereign state and this is not acceptable says GMB

UK energy firm BG, using the investor state disputes settlement mechanism (ISDS) in the UK/ Argentina trade deal to bypass the Argentine Courts in a dispute between Argentina and the company in 2002, have recently secured an award of U$185 million after Argentina lost an appeal in the US Supreme Court. 

Under the terms of a bilateral investment treaty (BIT) signed with the UK in 1990 BG was able to opt out of the dispute being dealt with in the Argentine Courts. Instead they choose to have the dispute dealt with using the investor state disputes settlement mechanism (ISDS) which led them into the US courts instead.

The dispute arose after the Argentine Government froze energy prices and suspended the dollar-peso parity following the economic crash in 2002. BG was the majority shareholder in Metrogas who supplied gas to much of the greater Buenos Aires conurbation.

The BG Group was formed in 1997 after a demerger from the single private entity that was formed in 1986 following the privatisation of British Gas. BG is not part of British Gas, owned by Centrica.

Bert Schouwenburg, GMB International Officer, said, “BG were able to use the ISDS in the bilateral trade pact to engage in “jurisdiction hopping” bypassing the domestic courts to settle a contractual dispute in a sovereign state like Argentina. This is simply not acceptable.

This case demonstrates why the EU should not be allowed to conclude any trade agreements that include the ISDS mechanism which allows such “jurisdiction hopping”.  The proposed trade deal with Canada (CETA)  and the USA (TTIP) both have clauses allowing such “jurisdiction hopping” by major firms like BG.

The UK Tory led government support the inclusion of ISDS in CETA and TTIP.  For them the ability of multinationals to bypass UK courts is a disposable commodity to be bargained away as power drains away from a sovereign UK nation state. This will not be accepted by the electorate.” 

End    

Contact:  Kathleen Walker Shaw 07841 181 549/ 00 32 2 2305675 or Bert Schouwenburg 07974 251 764 or GMB press office 07921 289880  

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