A/HRC/34/51
order to protect indigenous territories or environmental resources violated investors’ rights
under bilateral investment treaties. 61 The Government of Mauritius is currently being taken
to arbitration by a group of property development companies from the United Kingdom that
invested in luxury real estate developments in Mauritius and are now seeking damages for a
decision on the part of the Government to change its planning policy to restrict such
developments.62
55.
The mere threat of those kinds of claims can have a directive effect on State housing
policy. Investment treaty arbitration frequently involves millions of dollars in damages, and
thus acts as a disincentive for States to enact and enforce any regulatory measures
restricting the profitability of housing or real estate assets purchased by foreign investors.
Those whose right to adequate housing may have been infringed by States’ failures to
regulate the activities and speculative profits of foreign investors, on the other hand, have
few if any avenues of redress, and certainly no ability to seek damages in the amounts
claimed by private investors. The imbalance in access to remedies creates an imbalance in
State accountability and priorities.
B.
Domestic courts
56.
Domestic adjudication in the area of housing and finance has also tended to protect
investors and has been oriented towards enforcing the contractual relationship between
lenders and creditors, both with individual households and with States, without considering
imbalances in power or the implications for human rights of the means used for enforcing
repayment.63 The right to adequate housing has rarely been referenced in the adjudication of
foreclosures and subsequent evictions, although it is clearly at issue.
57.
In some instances, courts have played an important role in holding financial
institutions liable for predatory and discriminatory lending practices, albeit without
reference to international human rights obligations. In a recent case, the Eleventh Circuit
Court of Appeals in the United States ruled in favour of a lawsuit brought by the city of
Miami against Bank of America and Wells Fargo for discriminatory predatory lending
practices linked to the mortgage crisis. 64 The Constitutional Court of South Africa recently
considered a case involving a fraudulent scheme by investors and a finance company
leading to hundreds of homeowners suffering losses of homes and savings. The Court
rejected a claim by banks that would place responsibility on the homeowner for repayment
of an unpaid debt due to the bank, holding that there is an obligation on the part of wellresourced powerful banking groups to check on the legality of what their clients are buying
before lending money and earning interest on it.65
58.
There is considerable variation and inconsistency, however, in the way mortgage or
rental default is addressed in domestic law and enforced by courts. In many jurisdictions,
61
62
63
64
65
16
See Michael Ballantine and Lisa Ballantine v. Dominican Republic, Notice of arbitration and
statement of claim, 11 September 2014, and Álvarez and Marín Corporación S.A. and others v.
Panama (2015), International Centre for the Settlement of Investment Disputes (ICSID) case No.
ARB/15/14.
See Thomas Gosling and others v. Republic of Mauritius (2016), ICSID case No. ARB/16/32.
See Lauren E. Willis, “Introduction: why didn’t the courts stop the mortgage crisis?”, Loyola of Los
Angeles Law Review, vol. 43, No. 4 (January 2010), and Ada Colau and Adrià Alemany, Mortgaged
Lives: From the housing bubble to the right to housing (Journal of Aesthetics & Protest Press, Los
Angeles, Leipzig and Lon, 2014), pp. 165-167.
See City of Miami v. Bank of America Corp, in The United States Court of Appeals for the Eleventh
Circuit, case No. 14-14543.
See Absa Bank Limited v. Moore and Another (CCT 03/16), Constitutional Court of South Africa.
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