Investor Presentaiton
118
INVESTOR-STATE DISPUTE SETTLEMENT: A SEQUEL
arising out of investor non-compliance with domestic laws and
regulations:
"A Member State against whom a claim is brought by a
COMESA investor under this Article may assert as a defence,
counterclaim, right of set off or other similar claim, that the
COMESA investor bringing the claim has not fulfilled its
obligations under this Agreement, including the obligations
to comply with all applicable domestic measures or that it
has not taken all reasonable steps to mitigate possible
damages." (Article, 28(9), emphasis added).
One of the consequences of this approach is that States acquire
the ability to enforce relevant investor obligations through the IIAs'
dispute settlement procedures. This allows governments, for
example, to seek redress from investors that have ceased business
operations and withdrawn their assets from the host State, and
whose prosecution in the host State has low chances of successful
enforcement.
The case of Goetz v. Burundi was the first IIA arbitration where
the tribunal affirmed its jurisdiction over a respondent State's
counterclaim. Specifically, Burundi sought US$ 1 million from the
claimants for their bank's failure to honour the terms of a local
operating certificate. The tribunal found that despite the applicable
Belgium/Luxembourg-Burundi BIT's silence on the matter, it was
competent to consider the counterclaim pursuant to Article 46 of the
ICSID Convention as the counterclaim fell within the jurisdiction of
ICSID (i.e., related to the investment), was covered by the consent
of the parties and directly related to the object of the dispute. Having
UNCTAD Series on International Investment Agreements IIView entire presentation