Counterclaim by sovereign States: exceptional practice for environmental damages within international investment arbitration
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Abstract
Due to its legal complexity and a lack of conceptual development, the regulation of counterclaims is an unusual practice in international environmental law. The examination of counterclaims by sovereign states against foreign investors in the framework of investment contracts and environmental damage (in international cases arbitrated at UNCITRAL, ICSID and the PCA at Haya) suggests that the Ecuadorian state's counterclaims against Perenco Limited and Burlington Resources provide new elements for discussion. The analysis identifies global precedents that refute the idea that environmental damage is not arbitrable. The conclusions suggest the need to conceptualise the concept of counterclaims and to reform international treaty arbitration with an emphasis on environmental damages.
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