Why Clive Palmer lost his $300 billion case against Australia – and what it means for investor-state dispute settlement (ISDS)

As a politician, Clive Palmer has promised to Make Australia Great Again. He has also unsuccessfully sued Australia for $300 billion in damages over a rejected iron ore project in WA. 

The case was brought under the controversial Investor-State Dispute Settlement (ISDS) mechanism in an Australian trade treaty. In 2019, Palmer incorporated a company in Singapore, and argued that the Singaporean company was a 'foreign' investor in Australia entitled to access ISDS.

On Saturday, 27 September 2025 the Australian Attorney-General announced that, after over two and a half years, Australia had succeeded in having the case thrown out.

This is one of four cases that Palmer has brought against the Australian government using ISDS. The second and third cases relate to Queensland’s refusal to allow the development of Palmer’s proposed Waratah coal mine, and the fourth to a related attempt to build a new coal fired power plant. Palmer is claiming another $120 billion across the remaining cases. 

What was the case about?

The case relates to a dispute between Clive Palmer and multiple levels of government in Australia about Palmer’s proposed Balmoral South Iron Ore Project.

In 2012, the Western Australian government rejected Palmer's proposal for the project, which Palmer claimed breached their Government Agreement (an agreement between Palmer and the Western Australian government).

Palmer then brought legal proceedings in Australia against the Western Australian government.

In 2020, the Western Australian Parliament passed special legislation – the Amending Act - which stripped Palmer of his rights relating to the dispute. Palmer challenged the Act's validity in the High Court but lost.

How was Palmer able to continue pursuing the case after losing in the High Court?

Australia is a party to 25 treaties related to foreign investment protection, including the ASEAN-Australia-New Zealand Free Trade Agreement.

These treaties have two essential components. First, they provide legal protection to foreign investors from unfair treatment by government in countries in which they invest. Second, each country that is party to the treaty agrees in advance to participate in the international arbitration of claims made by foreign investors. This arbitration system is called investor-state dispute settlement (ISDS).

ISDS is unusual system that allows foreign investors to internationalise disputes with the governments of the countries in which they invest. In the absence of ISDS, these disputes would be conclusively resolved in national courts. 

In 2019 Palmer transferred the ownership of his Australian assets to a newly incorporated Singaporean company – Zeph Investments – which he owns and controls. Palmer’s Singaporean company then commenced ISDS proceedings against the Government of Australia, on the basis that his Singaporean company was a ‘foreign’ investor in Australia.  

How do ISDS proceedings work? 

ISDS differs from court proceedings because it involves a tribunal specifically appointed to deal with one dispute. Palmer’s Singaporean company appointed one arbitrator to the tribunal, Australia appointed a second arbitrator and, together, they selected a third arbitrator to preside over the case. 

These three arbitrators are not part of any international institution or court; they were appointed solely for the purpose of deciding this dispute. Their authority to decide the case came from Australia’s prior agreement to participate in ISDS when it became party to the ASEAN-Australia-New Zealand Free Trade Agreement (Singapore being one of the ASEAN Member States). 

This ISDS case was administered by the Permanent Court of Arbitration, what is that? 

The Permanent Court of Arbitration is not a court. It does not have any judges, or any authority of its own to decide legal disputes. It is an institution that provides basic administrative assistance in running arbitrations, including ISDS cases. 

The Permanent Court of Arbitration’s grand (and somewhat misleading) name led to confusion in the way the Palmer case was initially reported in the media. The case did not involve some sort of international ‘super-court’ hearing a final appeal against Palmer’s 2021 loss in the Australian High Court. 

What was the outcome of this case?

After two and half years, the Tribunal has thrown the case out and ordered Palmer’s Singaporean company to pay Australia’s $13.6 million of legal costs in full. This is the best outcome that the Australian government could have hoped for, although it remains to be seen if the company will pay up.

Why did Palmer lose?

While the decision is not yet public, Australia argued that Palmer’s Singaporean company was not a genuine foreign investor in Australia. Specifically, Australia argued that Palmer’s Singaporean company did not have substantive business operations in Singapore and that it was – essentially – a shell company that had been created for the purpose of bringing ISDS cases against Australia, at a time when the dispute about the Balmoral South Iron Project was already foreseeable. It appears that these arguments were successful. 

Is that the end of things?

Palmer’s only remaining option is to seek to challenge the decision of the ISDS tribunal in the courts of Switzerland, which is where the ISDS proceedings took place. Palmer has already spent $7.9 million pursuing this ISDS case against Australia and has signalled that he will pursue every last option, including a challenge in Switzerland. 

However, there is no possibility of appeal against the decision as such. Instead, any challenge in Swiss courts would have to be brought on one of a limited range of grounds – for example, that the ISDS proceedings were conducted in a way that was fundamentally unfair. Palmer’s prospects of success in this challenge are low. 

In the unlikely event Palmer were to succeed in challenging the decision, the case would go back to the ISDS tribunal for rehearing. 

If Palmer had won the ISDS case, would the Australian Government have had to pay?

Even if Palmer had won the ISDS case, he would not have been awarded anything like $300 billion in compensation. The amount he was seeking was always ridiculous. He did, however, have a realistic shot at compensation in the low billions of dollars if he had been successful. This is still a very large amount of money, and one reason why it was important for Australia to defend the case vigorously.

Powerful mechanisms enforce ISDS tribunals’ decisions. If the tribunal had decided in Palmer’s favour and Australia had refused to pay the required compensation, then his Singaporean subsidiary could have sought court orders seizing Australian government assets in almost any country around the world.

Clive Palmer is pursuing four ISDS cases against Australia. What does the outcome of this case mean for the remaining three cases?

The three remaining cases relate to coal projects in Queensland. Two of them relate to the Queensland government’s refusal to approve his proposed Waratah Coal mine, while the third relates to a proposal to establish a new coal-fired power station in conjunction with that mining project. Palmer is seeking a combined total of $120 billion in damages across these three cases.

This decision puts Australia in a strong position to defend the remaining three cases. Australia will presumably run the same legal arguments – that Palmer’s Singaporean company is not a genuine foreign investor in Australia – in these cases as well. However, because there is no system of precedent in ISDS, and because the tribunals in each of the remaining cases involve different combinations of arbitrators, there is no guarantee that they will reach the same outcome.

What does this mean for the future of ISDS?

The Australian government no longer includes ISDS provisions in its trade and investment agreements. The Palmer saga shows why the Australian government is right to reject ISDS. In this case, Australia has spent at least $13.6 million of public money defending a case that never got past the preliminary question of whether Palmer’s Singaporean company was a genuine foreign investor. If this case had gone ahead to a full hearing, it could easily have taken twice as long and cost twice as much. Then there are the legal costs associated with the remaining three cases. Australia may ultimately recover most of these legal costs, but that is not guaranteed.

The Australian government is right to defend vigorously each of the Palmer cases. But the time, energy and cost of doing so highlight serious flaws with ISDS as a system. ISDS is a slow and costly system that is vastly inferior to the justice that can be provided by Australian courts.