Nurhima Kiram Fornan and others v. Kingdom of Spain
ICSID · Investment (ICSID and treaty) · Spain · 6 Nov 2025
Why it matters
This case is significant because it clarifies that a monetary interest in an arbitral award does not constitute an investment under a BIT unless the underlying transaction is an investment in the host state. It also confirms that early dismissal under ICSID Rule 41 is appropriate when jurisdictional defects are manifest, even in novel factual scenarios. The decision reinforces the territorial limitation in investment treaties and prevents states from facing treaty claims based on tenuous connections to arbitral proceedings.
Summary
The Claimants, members of the Royal Family of Sulu, sought to enforce an 1878 Agreement with Malaysia for lease payments. They initiated an ad hoc arbitration against Malaysia, which resulted in a USD 18 billion award. Spain's courts had initially appointed the arbitrator but later revoked the appointment due to improper service. The arbitrator moved the seat to France and issued the award. Spain then criminally prosecuted the arbitrator. The Claimants brought an ICSID claim against Spain under the Philippines-Spain BIT, alleging that Spain's conduct (including the criminal proceedings) violated fair and equitable treatment and constituted a denial of justice. They claimed that their interest in the Final Award was an investment in Spain. Spain objected under ICSID Rule 41, arguing that the claim manifestly lacked legal merit because there was no investment in Spain. The Tribunal agreed, holding that the alleged investment, a monetary interest in an award against Malaysia, was not an investment under the BIT and had no sufficient connection to Spain. The award was issued in France, the underlying dispute concerned land in Malaysia, and Spain's involvement was limited to assisting in arbitrator appointment. The Tribunal dismissed the claims and ordered the Claimants to pay Spain's costs.
The detail
Parties: Nurhima Kiram Fornan and others v. Kingdom of Spain
Case number: ICSID Case No. ARB/24/45
Outcome: The Tribunal dismissed the claims as manifestly without legal merit under ICSID Rule 41, finding it lacked jurisdiction because the Claimants had no investment in Spain. The Claimants were ordered to pay Spain's costs.
Applicable law: Philippines-Spain Bilateral Investment Treaty (1993), ICSID Convention, ICSID Arbitration Rules 2022
Issues in play: The key issue was whether the Claimants' alleged investment, a monetary interest in an arbitral award against Malaysia, qualified as an 'investment' under the BIT and whether it was located in Spain. The Tribunal held that the award had no sufficient connection to Spain, as the underlying dispute concerned land in Malaysia and the award was issued in France.
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