Based on the recognition that the uncertainty concerning the questions of jurisdiction and admissibility of counterclaims has, in the current practice, led to a pessimistic appraisal of the possibility of raising counterclaims as an option that is not readily available to the host state, this chapter seeks to clarify the requirements of jurisdiction and admissibility for filing counterclaims. After arguing that the determinative element for the parties’ consent to counterclaims is the scope of investment disputes given in the relevant IIA, it confirms, through analysis of the IIA dataset, that the content is actually given under the majority of IIAs. It then examines the questions of admissibility, focusing on the requirement of a close connection between the principal claim and the counterclaim, as well as the issue of a parent company’s liability under a counterclaim based on alleged damage caused by its local subsidiary.