National Gas S.A.E. v. Arab Republic of Egypt
ICSID · Investment (ICSID and treaty) · Egypt · 3 Apr 2014
Why it matters
This award is a landmark application of the ICSID Convention's control test under Article 25(2)(b). It confirms that tribunals will look beyond formal corporate structures to identify the ultimate controller's nationality, even if the corporate chain was established for legitimate fiscal reasons. The decision reinforces that a claimant cannot invoke ICSID jurisdiction if it is controlled by a national of the respondent state, regardless of the nationality of intermediate holding companies. It also clarifies that a bilateral investment treaty cannot override the ICSID Convention's nationality requirements.
Summary
National Gas S.A.E., an Egyptian company, brought an ICSID claim against Egypt under the Egypt-UAE BIT, alleging expropriation of its right to arbitrate and a prior CRCICA award. The Claimant was 90% owned by CTIP, a UAE company, which was wholly owned by REGI, also a UAE company, ultimately controlled by Mr. Reda Ginena, an Egyptian national. Egypt objected to jurisdiction ratione personae, arguing that the Claimant was controlled by an Egyptian national, thus failing the requirement under Article 25(2)(b) of the ICSID Convention that the claimant be a 'national of another Contracting State'. The Tribunal bifurcated the proceedings and held a hearing on jurisdiction. Applying the 'control test' from precedents like Vacuum Salt and TSA Spectrum, the Tribunal found that Mr. Ginena, an Egyptian national, controlled the Claimant through his 95% direct and indirect shareholding. The Tribunal rejected the Claimant's argument that Mr. Ginena's deemed Canadian nationality under the Egypt-Canada BIT could modify the ICSID Convention. Consequently, the Tribunal upheld Egypt's objection and declined jurisdiction. The Tribunal did not rule on Egypt's temporal objection. Each party bore its own costs, and the Claimant paid all tribunal costs.
The detail
Parties: National Gas S.A.E. v. Arab Republic of Egypt
Case number: ICSID Case No. ARB/11/7
Outcome: The Tribunal upheld Egypt's jurisdictional objection ratione personae, finding it had no jurisdiction because the Claimant was controlled by an Egyptian national, thus failing the objective test under Article 25(2)(b) of the ICSID Convention. Each party bore its own expenses; Claimant bore all tribunal costs.
Applicable law: ICSID Convention; Treaty between Egypt and United Arab Emirates on the Encouragement, Protection and Guarantee of Investments (1997); Vienna Convention on the Law of Treaties
Issues in play: The key legal collision was between the ICSID Convention's requirement that a claimant be a 'national of another Contracting State' (Article 25(2)(b)) and the fact that the Claimant, though incorporated in Egypt, was ultimately controlled by an Egyptian national (Mr. Reda Ginena). The Tribunal applied the 'control test' to look through corporate structures and determine the real controller's nationality.
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