3 - Counterclaims

Summary

This chapter, together with Chapters 4 and 5, discusses the host state’s counterclaims against the claimant investor. It first discusses the benefits and obstacles of the use of counterclaims by comparing their use with the option of pursuing investors’ legal responsibility through the host state’s own courts. It then discusses the normative grounds for the host state’s environmental counterclaims in the light of the existence of the interests of the victims. Based on assessments of (a) the state’s obligation to protect against private persons’ human rights abuses and (b) the parens patriae doctrine developed in international and certain domestic jurisprudence, it is concluded that the host state has the right to pursue investors’ responsibility both in its own right and on behalf of the victims. It then proceeds to examine whether there are circumstances in which the admissibility of such counterclaims should be denied in light of the victims’ due process rights. This question is answered in the positive, and the factors that make the counterclaim inadmissible on this ground are identified.