GesRZ-Spezial Aktuelle Praxisthemen im Unternehmensrecht und im Schiedsverfahren - Festheft für Günther Horvath

Amanda Neil / Katherine Khan

In the investment arbitration context, a counterclaim is a claim by the host State against the investor in response to the investor’s initial claim under an investment treaty. When considered against the background of the backlash against investor-State dispute settlement (ISDS), counterclaims suggest a way of levelling the playing field to help resolve some States’ discontent with investment arbitration. However, the possibility of counterclaims remains an unresolved topic at UNCITRAL Working Group III.

In this short tribute, we do not attempt to exhaustively discuss counterclaims in investment arbitration. Instead, we aim to outline the general position of, and highlight some complexities with, counterclaims in ISDS. We focus only on the position under investment treaties, given that they are the primary source of investment arbitrations.

I. Counterclaims in ISDS

It has been suggested that respondents to arbitrations have a fundamental right to bring counterclaims, rooted in their right to be heard, the adjudicator’s inherent power to hear counterclaims, and for reasons of procedural economy. However, unlike in commercial arbitration or inter-State arbitr...