Barack Obama has been in Europe. British observers – always suckers for American blandishments that the UK is The Special One – saw in the president’s visit a mission to rescue the EU referendum for Remain. But Obama’s overriding aim, as became clear when he progressed to Germany, was to speed the EU-US talks over the Transatlantic Trade and Investment Partnership (TTIP) before he leaves office in January. A salient goal of TTIP is to shadow the Investor-State Dispute Settlement system (ISDS), an instrument of public international law granting firms the right to raise an action in a tribunal on the basis that a state’s policies have harmed their commercial interests.

The implications for national governments seeking to regulate capitalism in the public interest are obvious. The economist Max Otte has called ISDS ‘a complete disempowerment of politics’. The tribunals are confidential, as is usual in arbitration. Negotiations over ISDS within TTIP are also secret, the aim being to get the ink dry on the agreement before it can provoke opposition by being made public.

Bilateral ISDS treaties have been around since the late 1950s, but ISDS litigation has rocketed in the last twenty years. Cases are now being filed at the rate of one a week. In January, an ISDS tribunal in The Hague overruled the Ecuadorian Supreme Court, which in 2013 confirmed the judgment of a lower Ecuadorian court that the oil firm Chevron would have to pay out $9.5 billion in damages for polluting the environment in the Oriente region.

Texaco, acquired by Chevron in 2001, began drilling in the Ecuadorian Amazon in 1964. Billions of litres of wastewater were dumped in the rivers, contaminating food sources and exposing inhabitants to carcinogenic toxins responsible, inter alia, for elevated child leukaemia rates. Indigenous Ecuadorians say that oil workers dynamited their homes and subjected them to sexual and other violence. Chevron says it ‘is defending itself against false allegations that it is responsible for alleged environmental and social harms’.

Ecuador has already been whacked by ISDS litigation initiated by petrol firms. In 2012 it was fined $1.8 billion plus interest – more than its annual healthcare budget – after it cancelled a joint exploration venture with the oil giant Occidental. Meanwhile, the Australian mining firm OceanaGold is suing El Salvador for withholding gold extraction permits from its subsidiary Pac Rim Cayman LLC – a result of government concerns that cyanide, used in early mining to extract gold from its ore, had polluted water supplies. OceanaGold is after $284 million, more than El Salvador's annual foreign aid income.

On 19 April, the human rights lawyer Alfred de Zayas told the Council of Europe that 'the proposed TTIP investment court system is but a zombie of ISDS'. Chevron has lobbied Brussels to beef up the ISDS element of TTIP; the firm has prospected for shale gas in Romania and Poland. In 2012 the Swedish nuclear firm Vattenfall sued Germany over its decommissioning of nuclear plant after Fukushima, for a reported $4 billion.

Vattenfall and other ISDS litigants allege 'expropriation', a cloudy notion, put out to consultation ahead of talks over ISDS at TTIP. Direct expropriation covers such policies as nationalisation without compensation; indirect expropriation includes, in principle, whatever might degrade an investment's value, such as laws enforcing workers' rights, environmental protection, product safety, healthcare standards and so on. 'Property' lost by expropriation may stretch to anticipated revenue streams and knock-on effects on asset values.

As the Economist put it, ‘if you wanted to convince the public that international trade agreements are a way to let multinational companies get rich at the expense of ordinary people, this is what you would do.’