This is from the explanation of TPP ISDS by the New Zealand Ministry of Foreign Affairs and Trade:
The safeguards in TPP, which protect the New Zealand Government’s right to regulate and which seek to prevent unwarranted ISDS claims, include:
...
The Government is expressly permitted to make a counterclaim and obtain damages when the investor is in the wrong under a covered investment agreement.
I haven't paid attention to counterclaims under ISDS, so I have several questions here:
-- Is this something new for the U.S., or do the Model BIT and past U.S. treaties/investment chapters have such a provision?
-- What does it mean for an investor to be "in the wrong"?
-- What is a "covered investment agreement"?
Hopefully the release of the TPP text will clarify the latter two.
I'm having trouble figuring out whether this will be anything meaningful. If there is a real chance investors could subject themselves to counterclaims, it could be a deterrent to bringing cases, but I don't know if there is a real chance.
