Research on Counterclaim Rules in International Investment Arbitration

<p class="MsoBodyText" align="justify">In recent years, with the rapid development of international investment, inevitably, the investment disputes between foreign private investors and the host country are increasing. From the results of the cases submitted to ICSID arbitration, it can be seen that the investor’s winning probability is extremely high, which leads to the imbalance of interests between investor and the host country, and it is difficult to protect the legitimate rights and interests of host country. In this case, the host country may initiate counterclaim arbitration proceedings against the investor’s arbitration request according to the provisions of international investment arbitration treaties, international investment agreements or domestic laws to offset the investor’s request. However, in the practice of examining and dealing with the counterclaim of the host country, the arbitration tribunal often has strict requirements on the jurisdiction and acceptance conditions of counterclaims. On the one hand, the counterclaim clauses involved in the convention are vague, and the standards of “connection” and “consent” are difficult to identify. On the other hand, the lack of investor’s obligation clauses in investment agreements makes it difficult to obtain strong legal support for counterclaims. In order to solve the application dilemma of the host country’s counterclaim rules in practice, the arbitral tribunal should give priority to factual relevance when judging whether the counterclaim is related to the original claim. The way of opposing the request for “consent” should be appropriately modified, and a broader identification standard should be adopted. On the one hand, the host country should strive to set up a special counterclaim clause in the investment agreement, and adjust the rights and obligations structure of both parties in international investment agreement.</p>