Investment arbitrations typically entail an investor alleging breaches by the respondent State of protections conferred on the investor by the State in an investment treaty. However, it is rare for States to assert counterclaims, and even more rare for tribunals to determine those counterclaims on the merits. While there may be practical reasons why States prefer not to raise counterclaims before investor-State tribunals (including a preference to litigate those issues in their national courts), counterclaims are also limited by jurisdictional and admissibility hurdles that do not apply to the investor's claims. One such admissibility impediment is the requirement that the counterclaim be "closely connected" to the investor's claim.
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Originally published by VentureBeat.
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