Are Counterclaims in Investment Treaty Arbitration an Effective Tool to Protect the Environment?
Published 21 June 2023
Abstract
Investment arbitration was first conceived as an instrument for investors' rights; therefore, counterclaims were not always as common as they are now. This juridical tool - which should not be confused with states' defence - is not only a chance for States to be heard by bringing their own claims but, ultimately, may be a key factor in the yet shy practice of holding investors accountable under international arbitration. With climate and environmental issues in the spotlight, more recent investment treaties bring greater environment-friendly provisions, supporting States' right to regulate, creating environmental and sustainability obligations for parties. Those new provisions may help with some jurisdictional issues such as cause of action, but they may also bring other discussions such as the justiciability of the non-investment matters therein contained. Older (yet applicable) treaties do not have express provisions and there is still no consensus on the justiciability of environment protection and actions for climate change mitigation or adaptation before arbitral tribunals, as they are closely related to States' policy and rule-making. This article aims to analyse jurisdictional issues for the justiciability of environmental counterclaims in investment treaty arbitration. First, we will analyse counterclaims from its jurisdictional and admissibility aspects.
Second, we will examine the doctrine of justiciability from the perspectives of the subject matters and tribunal’s understanding of its own jurisdiction. Finally, we will explore the relationship between environmental matters and investment arbitration, before drawing our conclusions on the possibility and adequacy of adjudicating environmental issues in investment arbitration through State counterclaims.
This paper will be part of the second TDM Special Issue on "International Investment Arbitration - Environmental Protection and Climate Change Issues". More information here www.transnational-dispute-management.com/news.asp?key=1893