KUALA LUMPUR (Jan 27): The Trans-Pacific Partnership (TPP) agreement does not allow foreign companies and investors to sue governments arbitrarily, Nancy Shukri told the Dewan Rakyat today, amid concerns over the investor-state dispute settlement (ISDS) mechanism.

The minister in the Prime Minister's Department said the trade pact contained safeguards on whether a case against a state could be brought before a tribunal.

"They cannot arbitrarily summon the government to an international tribunal using ISDS.

"There are several safeguards stipulated under the TPP agreement. The investor needs to prove that they incurred losses due to the government's actions (before suing the government)," she said in her winding speech to points raised by lawmakers during the TPP agreement debate.

Nancy added that the investor must pay costs to the government if the case was found to be frivolous.

Opposition lawmakers have often criticised ISDS, a major component under TPP agreement, as it allowed foreign companies to drag governments to an international tribunal if state policies affected the firm's investments in the country.

They said it would cripple Putrajaya's ability to pass laws and make policies.

The Dewan Rakyat is expected to pass the motion on TPP agreement today, after a two-day special sitting ahead of the signing of the trade pact next month.