Counterclaims in Investor-State Arbitration

37 Pages Posted: 30 Jan 2012 Last revised: 4 Sep 2012

See all articles by Yarik Kryvoi

Yarik Kryvoi

The British Institute of International and Comparative Law (BIICL)

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Date Written: January 27, 2012


Although nearly all arbitration rules provide for the right to assert counterclaims in investor-state disputes, many tribunals are reluctant to allow such counterclaims. The two key issues, which tribunals and this Article examine, are investor consent to counterclaims and determination of investor obligations towards the host State.

This Article examined jurisprudence of the Iran-U.S. Claims Tribunal, International Center for Settlement of Investment Disputes tribunals, and UNCITRAL tribunals. The examination suggests that if the relevant treaty contains an offer of jurisdiction only in relation to disputes arising out of State obligations, tribunals are reluctant to extend their jurisdiction over counterclaims. However, if the relevant dispute resolution provision is broad or the parties subsequently alter the jurisdictional offer either explicitly or implicitly tribunals are more likely to allow counterclaims.

The Article shows that in the absence of investor obligations provisions in international treaties, general principles of law appear to be an appropriate source of international law to determine such obligations. The State may also assert counterclaims if the investor breached its obligations under the investment contract concluded with the State. The State, however, cannot assert counterclaims in investor-state arbitration based on purely domestic law obligations of investors.

Keywords: investment arbitration, investor-state disputes, BITs, sources of international law, counterclaims, ICSID, UNCITRAL, Iran-US Claims Tribunal

JEL Classification: K33, K42, K49

Suggested Citation

Kryvoi, Yarik, Counterclaims in Investor-State Arbitration (January 27, 2012). Minnesota Journal of International Law, Vol. 21, No. 2, pp 216-252, 2012, Available at SSRN:

Yarik Kryvoi (Contact Author)

The British Institute of International and Comparative Law (BIICL) ( email )

Charles Clore House
17 Russell Square
London, WC1B 5JP
United Kingdom


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