Ayat Nizar Raja Sumrain and others v State of Kuwait - ICSID Case No. ARB/19/20 - Procedural Order No 2 - Decision on Bifurcation - 1 February 2021
Reproduced from www.worldbank.org/icsid with permission of ICSID.
On 12 June 2019, Ayat Nizar Raja Sumrain (the "First Claimant"), Eshraka Nizar Raja Sumrain (the "Second Claimant"), Alaa Nizar Raja Sumrain (the "Third Claimant"), and Mohamed Nizar Raja Sumrain (the "Fourth Claimant") (together, the "Claimants"), filed with the International Centre for Settlement of Investment Disputes ("ICSID") a Request for Arbitration against the State of Kuwait ("Kuwait" or the "Respondent") on the basis of the Agreement for the Promotion and Reciprocal Protection of Investments between the Government of the Arab Republic of Egypt and the Government of the State of Kuwait (the "Kuwait-Egypt BIT"). The ICSID Secretary-General registered the Request for Arbitration on 30 June 2019.
Following a first session held on 13 April 2020 and a case management meeting held on 26 June 2020, the Tribunal issued Procedural Order No. 1 ("PO1") on 30 June 2020. Annex A to PO1 sets forth the procedural calendar, including a separate briefing schedule for a potential request for bifurcation. Annex A was modified by agreement of the Parties on 22 July 2020 and further modified by the Parties' agreements of 6 and 28 October 2020.
Pursuant to the procedural calendar, on 10 December 2020, the Claimants filed a Memorial on the Merits (the "Memorial"), together with: (i) the Witness Statement of Ayat Nizar Raja Sumrain dated 10 December 2020; (ii) the Expert Report of Steve Harris and Glenn Brill of FTI Consulting dated 10 December 2020, with Appendices 1 through 10 and Exhibits FTI-001 through FTI-0077; and (iii) Exhibits C-0001 through C-0260 and Legal Authorities CL-0001 through CL-0054.
On 8 January 2021, the Respondent filed a Request for Bifurcation (the "Request"), together with: Exhibits R-0001 through R-0005 and Legal Authorities RL-0001 through RL-0048.
On 21 January 2021, the Claimants filed a Reply to Request for Bifurcation (the "Reply"), together with: Exhibit C-0261 and Legal Authorities CL-0055 through CL-0070.
THE RESPONDENT'S REQUEST FOR BIRFURCATION
The Respondent has requested that five objections to the Tribunal's jurisdiction and/or the admissibility of the Claimants' claims be determined in a preliminary phase of these proceedings, with a hearing scheduled for 18-19 May 2021 for this purpose.
Those five objections, as formulated by the Respondent in its Request, are as follows:
a. The Tribunal does not have jurisdiction ratione personae because the Claimants have failed to discharge their burden of proving that they validly hold Egyptian nationality ("First Objection");
b. The Tribunal does not have jurisdiction ratione materiae because the Claimants have failed to demonstrate that they have made an investment under the Kuwait-Egypt BIT and the ICSID Convention ("Second Objection");
c. The Tribunal does not have jurisdiction ratione temporis and/or the Claimants have committed an abuse of process because the Claimants made their alleged investments after their claims and/or the dispute arose ("Third Objection");
d. The Claimants' claims are inadmissible because as shareholders of Heritage Village Real Estate Company ("HVREC") they have no rights to the Heritage Village Project ("Project") or rights under the Build Operate and Transfer contract entered into between HVREC and the Ministry of Finance of Kuwait dated 24 November 2004 ("Contract") and/or the claims are purely contractual and/or there is an exclusive jurisdiction clause in the Contract in favour of the Kuwaiti courts ("Fourth Objection"); and
e. The Claimants have failed to comply with the pre-conditions to jurisdiction in Article 10 of the Kuwait-Egypt BIT (written notification and six-month period to pursue amicable settlement) ("Fifth Objection").
THE TRIBUNAL'S RULING
The Tribunal orders the bifurcation of the Second, Third and Fifth Objections raised by the Respondent. Given this ruling, the Claimants are invited to consider whether they would wish to include, at their discretion, any of the other objections raised by the Respondent in the preliminary phase (the Tribunal proceeds on the assumption that the Respondent, having requested that all its objections be heard in the preliminary phase has already consented to the same). The Claimants are requested to state their position on this issue on or before 5 February 2021.
The Tribunal confirms that it has additional availability on 20 May 2021 should the Parties consider that a three-day hearing is required. The Parties are invited to state their position on this issue on or before 12 February 2021.
For and on behalf of the Tribunal,
Prof. Zachary Douglas QC
President of the Tribunal
Date: 1 February 2021