Summary

Source: icsid.worldbank.org

TABLE OF CONTENTS

I. INTRODUCTION AND PARTIES
A. Procedural History
II. JURISDICTION
A. Whether NICO's Claims Are an Abuse of Process
(1) The Parties' Positions
a. Bahrain's Position
(i) The Legal Test for an Abuse of Process Objection
(ii) NICO's Claims Based on Re-domiciliations Are an Abuse of Process
(iii) The Circumstances Surrounding NICO's Domicile Changes Indicate that There Was an Abuse of Process
(iv) NICO's References to the Bahrain-Iran BIT Cannot Excuse its Abuse of Process
b. NICO's Position
(i) Burden of Proof and the Applicable Standard
(ii) There Can Be No Abuse When Treaty Protection Was Always Available
(iii) The Timing of the Arbitration Is Incompatible With Treaty Shopping
(iv) The Abuse of Process Test Not Met Regarding NICO's January 2012 Re-domiciliation
(v) The Abuse of Process Test Not Met Regarding the January 2017 Process Leading Up to the 2018 Decision
(2) The Tribunal's Analysis
B. Whether the Treaty Applies to Events Occurring Before Its Entry into Force or When NICO Lacked Malaysian Nationality
(1) The Parties' Positions
a. Bahrain's Position
b. NICO's Position
(2) The Tribunal's Analysis
C. Whether NICO Was Incorporated in Labuan During the Absence Period
(1) The Parties' Positions
a. Bahrain's Position
b. NICO's Position
(i) The 2018 Decision Confirms NICO's Malaysian Status From December 2014 to March 2018
(ii) NICO Has Standing Under the BIT as a Malaysian Investor Since January 2012
(iii) Bahrain's Claims That NICO Was Not Malaysian From December 2014 to March 2018 Are Irrelevant and Flawed
(2) The Tribunal's Analysis
III. DECISION

I. INTRODUCTION AND PARTIES

1. This case concerns a dispute submitted to the International Centre for Settlement of Investment Disputes ("ICSID" or the "Centre") on the basis of the Agreement between the Government of Malaysia and the Government of the Kingdom of Bahrain for the Promotion and Protection of Investments, dated June 15, 1999 (the "BIT" or "Treaty") and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, which entered into force on October 14, 1966 (the "ICSID Convention").

2. The claimant is Naftiran Intertrade Co. (NICO) Limited ("NICO" or the "Claimant"), a company registered in the Federal Territory of Labuan, Malaysia.

3. The respondent is Kingdom of Bahrain ("Bahrain" or the "Respondent").

4. The Claimant and the Respondent are collectively referred to as the "Parties." The Parties' representatives and their addresses are listed above on page (i).

5. This dispute relates to the Claimant's claim under the BIT arising out of its deposits in two Bahraini banks, which refuse to transfer the funds on account in favour of NICO out of Bahrain. At issue in this ruling is whether the Tribunal has jurisdiction over NICO's claim.

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III. DECISION

317. For the foregoing reasons, the Tribunal, by majority:

a. Dismisses the Respondent's preliminary objection on abuse of process;

b. Finds that the Treaty does not apply to acts and omissions that occurred prior to its entry into force;

c. Finds that NICO must have held Malaysian nationality at the time of the alleged breaches of the Treaty for the Tribunal to have jurisdiction ratione temporis;

d. Finds that disputes relating to alleged breaches that occurred prior to January 4, 2012, when NICO was incorporated in Jersey and not Labuan, are outside the Tribunal's jurisdiction;

e. Declares that NICO was, as a matter of Malaysian law and for the purposes of the Treaty, a Malaysian company throughout the Disputed Period from December 9, 2014 to March 7, 2018;

f. Postpones its decision on the allocation of costs of this bifurcated phase of the arbitration, the fees and expenses of the Tribunal and the Parties' costs and expenses of legal representation; and

g. Orders the continuation of the proceedings.

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