Burlington Resources Inc. v. Republic of Ecuador: a landmark decision in environmental counterclaims

Abstract

The Burlington Resources Inc. v. Republic of Ecuador counterclaims case turned into a landmark decision, being the first case in which an ICSID tribunal had fully admitted a counterclaim on the merits and, held an investor liable for environmental damages within the frame of a BIT. The present article is intended to analyze: (i) the different basis under which Tribunals have deemed themselves competent to hear a counterclaim in the legal framework of a BIT; (ii) the sui generis nature of admitting jurisdiction based in a compromise by the Burlington tribunal; and, (iii) the new Ecuadorian Model of Investment Treaty based on the recent Investment Treaty’s Tribunal decisions that are allowing States adequate relief by permitting protection of the environment and human rights of Host Countries. Discussion and criticism about the first ICJ decision awarding damages for a violation of international environmental law have also been brought under the light of this article.