Make a counterclaim in treaty-based investment arbitration

Document Type : Scientific research

Authors

ALIREZA SOORI ^{1 ¶}

HAMID REZA NIKBAKHT ²

¹ Ph.D. Candidate., Faculty of Law, Shahid Beheshti University, Tehran, Iran.

² Professor of Law, Faculty of Law, Shahid Beheshti University, Tehran, Iran.

https://doi.org/10.22067/economlaw.2026.96572.1502

Abstract

In treaty-based arbitrations, the lack of jurisdiction and the inability to accept the counterclaims of host states are challenges that make the handling of such claims difficult and sometimes impossible. In the discussion of the jurisdiction of the arbitral tribunal, obstacles are found in obtaining the consent of the parties to the arbitration, and in the discussion of admissibility, the reliance is on the factor of the connection of the counterclaim with the claimant's main claim. The arbitrators' approach and interpretation of the applicable treaty terms in establishing the parties' consent and the relationship between the counterclaim and the main claim play a key role in the procedure. The civil procedural laws of various countries, the procedures of major investment arbitration tribunals, and the rules of institutional and ad hoc arbitrations provide for the possibility of counterclaims.The rules or arbitration rules governing counterclaims in treaty-based arbitrations (investor-state arbitrations) are interpreted and applied within the scope of the terms of the investment treaty. This study, by examining opinions, doctrine, arbitration laws, and international rules, attempts to explain and critique the challenges of handling counterclaims and seeks an appropriate approach for each challenge. In investment arbitration, considering the basis of their formation, the text of the arbitration clause contained in bilateral or multilateral investment treaties is the most important source of interpretation and application, and it must be carefully distinguished from each other by adopting a non-strict and flexible approach, establishing the competence and admissibility of the counterclaim.

Keywords

Counterclaim

Treaty-based arbitration

Jurisdiction to hear

competence

Capital host state

Subjects

• Foreign investment

---

References

. Alvarado-Garzón, A. E. (2023). Environmental Counterclaims in Investment Arbitration, Nueva York, Springer, P11-74.

[2]. Amco Asia Corporation and others v The Republic of Indonesia, (1993) Resubmitted Case, ICSID Case No. ARB/81/1, Decision on Jurisdiction, 10 May 1988, 1 ICSID Reports,

[3]. American Bell International Inc, Award No. ITL41-48-3.

[4]. Aminaei Chatroudi, Sahel, (2017), State counterclaims against investors in investment arbitrations, Master's thesis, Shahid Beheshti University. (In Persian)

[5]. Antoine Goetz et consorts v Republic of Brundi, (1999) ICSID Case No. ARB/95/3, Award,

[6]. Application of the Convention on the Prevention and Punishment of the Crime of Genocide, Bosnia and Herzegovina v Serbia and Montenegro, (1997), Dissenting opinion of Vice President Weeramantry

[7]. Atanasova, Dafina, Benoit, Carlos Adrian Martinez and Osransky, Josef, (2012), Counterclaims in Investor-State Dispute Settlement under International Investment Agreements, Graduate Institute Center for Trade and Economic Integration.

[8]. Atanasova, D., Benoit, A. M., & Ostranský, J. (2014). The legal framework for counterclaims in investment treaty arbitration. Journal of International Arbitration, P 31.

[9]. Bilanová, A. (2020). Environmental counterclaims in investment arbitration. European Investment Law and Arbitration Review Online, 5(1), P 400-411.‏

[10]. Brenninkmeijer, M., & Gélinas, F. (2023). Counterclaims in investment arbitration: Towards an integrated approach. ICSID Review-Foreign Investment Law Journal, 38(3), P 567-594.‏

[11]. Campbell, McLachlan, Shore, Lawrence, Weininger, Matthew (2017), International Investment Arbitration, translated by Junaidi, Laia, Shakib, Mohammad Reza, Ahmadpour, Bahareh, 1400, Mizan Publishing, Volume 1. (In Persian)

[12]. Case Concerning Oil Platforms (Islamic Republic of Iran v United States of America), CounterClaim, Order of 10 March 1998, Separate Opinion of Judge Oda, ICJ Reports

[13]. Cordero-moss, Giuditta, (2014), International Commercial Contracts, Cambridge University Press.

[14]. D. Caron, David, Caplan, Lee, (2006), The UNCITRAL Arbitration Rules, A Commentary, Oxford University Press.

[15]. De Luca, A., & Baltag, C. (2021). Counterclaims in Investment Arbitration: Reflections on UNCITRAL WG III Reform.‏

[16]. De Nanteuil, A. (2018). Counterclaims in investment arbitration: old questions, new answers? The Law & Practice of International Courts and Tribunals, 17(2), P 374-392

[17]. Derakhshannia, Hamid; "Comparative study of defects and obstacles in civil procedure", Journal of the Institute for Humanities and Cultural Studies, 2013. (In Persian)

[18]. Figanmese, Ataman, (2011), Manufacturing consent to Investment Treaty Arbitration by Means of the Notion of “Arbitration without Privity, Istanbul faculty of law.

[19. Fredric Sourgens and Michael Nolan, (2010), limits of consent, Kluwer journal.

[20]. Generation Ukraine Inc. v Ukraine, ( 2003) ICSID Case No. ARB/00/9, Award, 16 September.

[21]. Ghamami, Majid; "Counterclaim", Journal of Private Law, Faculty of Law, University of Tehran, No. 66, Winter 2004. (In Persian)

[22]. Ghamami, Majid, Mandegari, Fahimeh, (2019), International Investment Law: Concepts of Investor and Foreign Investment, Publishing Company. (In Persian)

[23]. H. Schreuer, Christoph, (2009), The ICSID Convention: A Commentary, Oxford University Press.

[24]. Junidi, Laia, (1999), Comparative Review of Iran's International Commercial Arbitration Law, Faculty of Law and Political Science, University of Tehran Publications. (In Persian)

[25]. Kendra, T. (2013). State counterclaims in investment arbitration-a new lease of life? Arbitration International, 29(4), P 575-606.‏

[26]. Kjos, H. E. (2013). The Scope of the Arbitration Agreement: Claims and Counterclaims of a National and/or International Nature, P 128-129.‏

[27]. Lalive, P., & Halonen, L. (2011). On the availability of counterclaims in investment treaty arbitration.‏

[28]. Mansourian, Ali, Alipour, Mohammad, 2016, Counterclaim in the Procedure of the International Court of Justice, Quarterly Journal of Public Law Research, No. 53. (In Persian)

[29]. Matin Daftari, Ahmad, (1999), Civil and Commercial Law, Majd Scientific and Cultural Association, Volume 2. (In Persian)

[30]. Maurici, L., & Staton, A. (2025). TOWARDS A BALANCE OF INTERESTS FOR THE INVESTOR-STATE IN CASE LAW. Juris Gradibus, 3, P 1-136.

[31]. Metal-Tech Ltd v Republic of Uzbekistan,(2013) ICSID Case No. ARB/10/3, Award, Oct 4,.

[32]. Mohammadi, Qasem; Zeinab, Gholamali and Karimian, Mehdi; “The will of the legislator and the role of the judge in the effectiveness of the provisions of the agreement”, Justice Legal Journal, Volume 85, Number 116, 1400. (In Persian) https://doi.org/10.22106/jlj.2021.520573.3856.

[33]. Mohebi, Mohsen; “Counterclaims in the International Tribunal for the Law of the Sea”, International Law Journal, No. 55, Winter 2016. (In Persian) https://doi.org/10.22066/cilamag.2016.23522.

[34]. Nikbakht, Hamid Reza, (1402), Arbitration of "Civil-Commercial Disputes", Practical Guide, Commercial Printing and Publishing Company. (In Persian)

[35]. Nikbakht, Hamid Reza, (1402), International Commercial Arbitration "Arbitration Code", Institute for Commercial Studies and Research, 4th edition. (In Persian)

[36]. Nikbakht, Hamid Reza, Jafari, Shahab, Jurisdiction of Investment Treaty Dispute Resolution Authorities in Investment Treaty and Contract Litigation, Journal of Legal Research, Spring 2013. (In Persian)

[37]. Nikbakht, Hamid Reza, Moein Foroughi, The Position of Transparency in Recent Developments in Investment Treaty-Based Arbitrations, Encyclopedia of Economic Law, No. 22, Fall and Winter 1401. (In Persian) https://doi.org/10.22067/economlaw.2023.74761.1138.

[38]. Qian, X., & Gu, F. (2025). Reconceptualizing counterclaim assessment in investment treaty arbitration: a discourse on fairness through Rawlsian justice theory. Journal of International Dispute Settlement, 16(2), idaf007.‏         

[39]. Saluka Investment B.V v Czech Republic Dicision on J urisdiction over the Czech Republic’s Counter claim,( 2004) UNCITRAL,.

[40]. Sarbazian, Majid; Siavashpour, Ismail; "The Basis of Issuing a Non-Hearing Order in Face of Legal Challenges Surrounding It", Scientific Research Quarterly Journal of Excellence in Law, Issue 6, Winter 2019. (In Persian) https://doi.org/10.22034/thdad.2020.241850.

[41]. Sergei Paushok et al v The Government of Mongolia, UNCITRAL, Award on Jurisdiction and Liability, 28 April 2011.

[42]. Shams, Abdullah, (2014), Advanced Civil Darcy, Volume 2, Drak Publications. (In Persian)

[43]. Shao, X. (2021). Environmental and human rights counterclaims in international investment arbitration: at the crossroads of domestic and international law. Journal of International Economic Law, 24(1), P 157-179.‏

[44]. Spyridon Roussalis v. Romania, ICSID Case No. ARB/06/1, Award, 7 December 2011

[45]. Steingruber, A. M. (2013). Antoine Goetz and others v Republic of Burundi: consent and arbitral tribunal competence to hear counterclaims in treaty-based ICSID arbitrations. ICSID review, 28(2), P 291-300.‏

[46]. Urbaser S.A. and Consorcio de Aguas Bilbao Bizkaia, Bilbao Biskaia Ur Partzuergoa v. The Argentine Republic, ICSID Case No. ARB/07/26, Award, 8 December 2016.

[47]. Vohryzek-Griest, Ana, (2009), State Counterclaims in Investor-State Disputes: A History of 30 Years of Failure, 15 International Law, Revista Colombiana de Derecho Internacional.

[48]. Wellhausen, R. L. (2016). Recent trends in investor–state dispute settlement. Journal of International Dispute Settlement, 7(1), P 117-135.‏

[49]. Zakhariy, Douglas, (2009), The International Law of Investment claims, Cambridge University Press.

[50]. Zamani, Qasem, Hasibi, Behazim, (2019), Principles of International Investment Law, Shahr Danesh Publications. (In Persian)