What you need to know
- The Swiss Federal Supreme Court has upheld the dismissal of Clive Palmer’s AU$300 billion ISDS claim against Australia.
- The Court found that his Singapore-incorporated entity (Zeph Investments) was not a protected investor because it made no economic contribution when acquiring the relevant Australian mining company.
- The ruling is final and reinforces Australia’s undefeated record in ISDS proceedings.
What you need to do
- Ensure your investments are structured to take advantage of treaty protections before disputes arise.
- Ensure that your company has substantial business activities and makes a genuine economic contribution in the host country.
- Seek specialist advice early regarding investment treaty protections.
Palmer's $300 Billion ISDS Defeat and What It Means for Foreign Investors
Clive Palmer's high-profile international case against the Australian Government over Pilbara mining rights has finally reached the end of the road. Earlier this month, the Swiss Federal Supreme Court upheld the 2025 decision of an international arbitration tribunal that dismissed Palmer's investor-State arbitration claims against Australia on jurisdictional grounds.
The Swiss court decision definitively ends one of the largest and most controversial investor-State dispute settlement (ISDS) claims brought against Australia, and reinforces a clear lesson for investors when it comes to investment treaty protections: how your investment is structured matters as much as what you invest in.
The Pilbara mining dispute: a brief history
Palmer's ISDS claims relate to a long-running dispute with the Western Australian Government over mining rights connected to his proposed Balmoral South Iron Ore Project in the Pilbara. In 2020, the State Government of Western Australia (WA) enacted legislation that, among other things (i) terminated ongoing arbitrations and nullified prior arbitral awards relating to the Pilbara project, (ii) retroactively extinguished any liability of the WA State, and (iii) removed rights of appeal and imposed an indemnity obligation in favour of the WA State. Palmer's challenge to the validity of that legislation before the High Court of Australia was unanimously rejected in October 2021.
Having exhausted domestic avenues, Palmer turned to pursue claims under international law. In January 2019, a Singapore-incorporated company called Zeph Investments Pte Ltd (ultimately owned by Palmer) had acquired all shares in Mineralogy, the Australian mining company owned by Palmer. In 2023, Zeph commenced an investor-State arbitration against Australia under the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), claiming approximately AU$300 billion in damages (PCA Case No. 2023-40).
No contribution, no protection: Why Zeph's claim failed
In September 2025, the arbitral tribunal unanimously dismissed the claim on jurisdictional grounds and ordered Zeph to pay Australia's costs of approximately AU$13 million.
The tribunal declined jurisdiction because it found that Zeph had made no economic contribution and committed no economic resources when it acquired Mineralogy. Accordingly, the tribunal concluded that Zeph was not a protected investor with a protected investment under the AANZFTA.
Australia also challenged the tribunal's jurisdiction on the basis that (i) it had provided notification that Zeph and its alleged investments were denied the benefits of ISDS protection, and (ii) Zeph's claims constituted an abuse of process since Zeph incorporated in Singapore for the main if not only purpose of bringing an investment claim against Australia arising out of an existing or foreseeable investment dispute. The tribunal did not determine these objections in view of its findings that Zeph was not an investor with a qualifying investment for the purposes of the AANZFTA.
Last stop in Switzerland: The court challenge
As the arbitration was seated in Switzerland, Palmer next proceeded to challenge the tribunal's decision in the Swiss Federal Supreme Court. On 5 August 2026, the Swiss Federal Supreme Court dismissed Palmer's challenge, upholding the award. This ruling is final and brings the saga to a definitive close.
Not over yet: Palmer's other pending ISDS claims
Presently there are three other ISDS proceedings brought by Zeph against the Commonwealth of Australia that are pending resolution, relating to:
- mineral exploration permits held by Palmer's subsidiary, Waratah Coal Pty Ltd, in the Galilee Basin of Queensland (PCA Case No. 2023-67);
- a Queensland Land Court recommendation and subsequent decisions of the Queensland Government to refuse an application by Waratah Coal for a mining lease and environmental authority for activities in the Galilee Basin (PCA Case No 2024-23); and
- decisions of the Queensland Government to refuse environmental authority and development approval for a proposed coal-fired power plant (Jericho Power Station) as part of the Galilee Coal Project (PCA Case No. 2024-48).
The value of these claims amounts to a total of approximately AU$120 billion.
Australia's spotless ISDS defence record
The Swiss court's upholding of the dismissal of Zeph's claims reaffirms Australia's clean track record in defeating ISDS claims from foreign investors on jurisdictional grounds.
Most notably, Australia previously prevailed against Philip Morris in ISDS claims arising from Australia's tobacco plain packaging legislation (Philip Morris Asia Ltd v Australia, PCA Case No. 2012-12). In that case, Philip Morris brought ISDS proceedings against Australia through a Hong Kong subsidiary pursuant to the Australia-Hong Kong bilateral investment treaty. An international tribunal dismissed Philip Morris' claims in December 2015 on jurisdictional grounds. The tribunal found that Philip Morris' restructuring to transfer ownership of its Australian subsidiaries to a Hong Kong entity amounted to an "abuse of rights" because it occurred at a time when the dispute was reasonably foreseeable and was carried out for the principal, if not sole, purpose of gaining treaty protection.
To date, no foreign investor has succeeded in ISDS proceedings against the Australian Government.
Lessons for investors
The outcome in Zeph v Australia once again underscores the significance of investment structuring and planning in order to benefit from protections offered under international treaties.
As cases like Zeph and Philip Morris have established, it can be imperative for investors to have regard to considerations such as:
- structuring investments to take advantage of investment protections under appropriate bilateral or multilateral treaties before any disputes are on the horizon;
- ensuring the investor has substantial or genuine business activities in the host country and makes a real economic contribution; and
- most importantly, seeking specialist advice early regarding investment treaty protections to preserve legal rights and mitigate risks.
Australia's latest success in defending against ISDS claims should not discourage legitimate foreign investment, but serves as a timely reminder that investors must plan ahead and have careful regard to investment treaty requirements in order to benefit from protections under international law.
Authors: Georgia Quick, Partner; Ruimin Gao, Counsel and Caroline Xu, Lawyer.
