International Investment Law (‘IIL’) has long faced criticism for privileging the transnational capitalist class while restricting the regulatory autonomy of host States. International Investment Agreements (‘IIAs’), particularly through Investor-State Dispute Settlement (‘ISDS’) mechanisms, offer broad protections to investors but often impede States from enacting regulations in the public interest, including those aimed at upholding human rights. This structural imbalance, rooted in the neoliberal design of IIL, instrumentalises law to facilitate investment flows at the expense of human and social rights. Tribunal practice further reinforces this asymmetry, as illustrated in Glencore v. Bolivia, where Bolivia’s human rights-based defences were dismissed due to the narrow scope of the applicable Bilateral Investment Treaty (‘BIT’). Within this constrained regulatory space, human rights challenges like the exploitation of labour have emerged as urgent yet under-addressed concerns. As global supply chains expand and transnational corporations grow in influence, the current IIL framework seems to lack an effective mechanism to hold investors accountable. Recent reform efforts, such as those by UNCITRAL Working Group III, propose counterclaim mechanisms within ISDS, enabling host States to assert claims against investors for human rights violations. However, activating these counterclaims could be difficult due to narrowly worded dispute resolution clauses, questions of admissibility, and the absence of explicit investor obligations in most IIAs. This paper explores the structural faults within IIAs and the possibility of human rights counterclaims as a mechanism to address investor complicity in human rights violations. This paper, cognisant of the challenges existing within BITs in the Global South, proposes human rights counterclaims as a methodology toward ensuring the accountability of the transnational capitalist class. Focusing specifically on post-2008 South Asian IIAs, which increasingly include provisions affirming States’ regulatory autonomy, this research investigates whether these agreements allow counterclaims toward achieving investor accountability. Through doctrinal analysis of tribunal decisions and treaty language, this research assesses the possibility of deploying counterclaims to ensure investor accountability in the context of human rights.
