Investment tribunals rarely examine host state arguments based on international human rights law in great depth. The ICSID award Urbaser v Argentina is the first to provide a detailed discussion of a host state’s human rights counterclaim. Hence, this decision presents an opportunity to more fully understand the role of human rights in investment arbitration. As the text of the award is very rich, this post focuses on whether the tribunal has created a precedent for a host state human rights counterclaim in ICSID arbitration.
The Dispute and Counterclaim
The dispute in Urbaser v Argentina arose as a result of Argentina’s financial crisis in 2001-2002. The claimant was a shareholder in a concessionaire that supplied water and sewerage services in Buenos Aires. Argentina’s emergency measures caused the concession financial loss and it eventually became insolvent. The claimant commenced ICSID arbitral proceedings against Argentina for violations of the Spain-Argentina BIT.
Except as the parties otherwise agree, the Tribunal shall, if requested by a party, determine any incidental or additional claims or counterclaims arising directly out of the subject-matter of the dispute provided that they are within the scope of the consent of the parties and are otherwise within the jurisdiction of the Centre.
The respondent’s counterclaim alleged that the concessionaire’s failure to provide the necessary level of investment in the concession led to violations of the human right to water.
The tribunal in Urbaser v Argentina is the first to accept jurisdiction over a human rights counterclaim. In doing so, it has simplified the jurisdictional requirements for ICSID counterclaims. Read the rest of this entry…