The enforcement of environmental norms in investment treaty arbitration

Human Rights and Environmental Counterclaims in Investment Treaty Arbitration

“…Another option for the States is to incorporate international norms and standards in its contract with the investor. 109 Counterclaims remedy the inherent asymmetry that exists in international investment arbitration. In the absence of an international adjudicative mechanism for the responsibility of business and foreign corporations, counterclaims provide States an effective avenue to claim damages for the breaches of human rights and environment law.…”

Examining host-State counterclaims for environmental damage in investor-State dispute settlement from human rights and transnational public policy perspectives

“…This renders environmental counterclaims virtually impossible under most circumstances and has been criticized by various authors as too demanding (Kjos 2007 , p. 46; Lalive and Halonen 2011 , pp. 7.41–7.42; Douglas 2013 , pp. 430–431; Atanasova et al 2014 , p. 383) and ‘makes the apparent availability of counterclaims a mirage’ (Lalive and Halonen 2011 , p. 7.40).…”

“…Doctrinal approaches have also evolved. Zachary Douglas has discerned a general principle from the practice of various international tribunals that the subject matter jurisdiction of an international tribunal ‘extends to counterclaims unless expressly excluded by the constitutive instrument’ (Douglas 2013 , p. 427). While this ‘express exclusion’ approach has by no means been uniformly adopted (Atanasova et al 2014 , pp.…”

“…Due to the fragmented nature of international investment law, the answer is that classic legal answer of ‘it depends’. With broad treaty language and factually connected claims, domestic legal obligations should be permitted as the legal bases of such claims (Douglas 2013 , pp. 424, 433, 442–443; Lalive and Halonen 2011 , pp.…”

“…The asymmetric nature of IIAs can act as a barrier to counterclaims against investors using ISDS, even where an investor causes significant harm to the host-State, including environmental damage. This is a result of international investment law having given investors a privileged position and is evidence of States favouring investment and trade over other important societal matters and concerns, including the environment (Douglas 2013 , p. 416).…”