Research On The Issue Of Host State Counterclaim Under International Investment Arbitration

When the host state counterclaim becomes a common possibility,it can greatly improve the current imbalance between the investor and the host state.However,the application effect of counterclaim in arbitration practice is not satisfactory.Not only are the cases of state counterclaims rare,but most of them are easily rejected by the arbitral tribunal.Apart from the fact that the IIAs unilaterally protect the investors and does not give the host state the space to lodge a counterclaim,the cautious attitude of the international investment tribunal to hear the counterclaim is also an important reason for this phenomenon.Therefore,in order to safeguard the interests of the host state in the settlement of investment dispute,the issue of state counterclaim in the international investment arbitration has attracted more and more attention.This paper has four chapters except preface and conclusion.Preface is mainly about the background and purpose of the host state counterclaim in international investment arbitration,research methods and literature review at home and abroad.Chapter 1 discusses the basic theory and legal basis of counterclaims in international investment arbitration.It is helpful to affirm the necessity of state counterclaim by combing the background of setting up state counterclaim,the concept and value of counterclaim.Then,after analyzing counterclaim provisions in international arbitration rules,it is concluded that the successful initiation of state counterclaim must meet the requirements of the jurisdiction of the arbitration tribunal and the required connection between the counterclaim and the main claim.Chapter 2 discusses the procedural requirements for the acceptance of counterclaim by international investment tribunals,and the requirements of"jurisdiction" and "admissibility" should be satisfied when the counterclaim cases heard by the tribunal.This chapter analyzes the counterclaim cases brought to ICSID arbitral tribunal,UNCITRAL arbitral tribunal,and SCC arbitral tribunal,and concludes that the jurisdiction of the arbitral tribunal needs to meet the conditions of "consent","consistency of the parties " and "investor obligation under the applicable law".The admissibility needs to consider the "connexion"between the host state counterclaim and the original claim.Chapter 3 discusses the substantive requirements of the international investment arbitral tribunal to award state counterclaims.This chapter examines the four main counterclaims to examine the reasons for obtaining support or being rejected in the arbitration hearing.They are counterclaims for breach of contractual obligations,counterclaims for moral damage,counterclaims for environment,and counterclaims for human rights.Although the substantive hearing of counterclaims cannot be concluded as procedural requirements,exploring the reasons why different counterclaims are supported or rejected in substantive trials is still valuable.Chapter 4 puts forward suggestions for improvement of counterclaim provisions in China’s IIAs.Based on the general situation of ISDS provisions in China’s IIAs,it is aware of the deficiencies of dispute resolution provisions and counterclaim provisions and reflects the urgency of introducing counterclaim rules in China’s IAA.Combined with the discussion on the legal basis and trial practice of counterclaim in previous chapters,it proposes that China should actively safeguard its rights and interests through counterclaim and improve the existing IAAs by formulating specific counterclaim clauses and stipulating investors’obligations.To sum up,this paper adopts text analysis and case analysis to study the theoretical rules and trial practice of counterclaim and adds the newly published case analysis compared with previous studies.By summarizing the procedural requirements of the international investment arbitral tribunals for hearing counterclaim and analyzing the substantive requirements for awarding counterclaims,it provides suggestions for the improvement of China’s IIAs.The study on strengthening the state counterclaim in investment arbitration is not only of great significance for adjusting the interest imbalance between the states and the investors but also helpful for China to improve the foreign investment treaties and actively safeguard its own rights and interests in the dispute settlement with the investors by using counterclaim.