Summary

Source: icsid.worldbank.org

I. PROCEDURAL BACKGROUND

1. On 4 October 2024, ENCORE Investment Group Limited ("Encore" or the "Claimant") submitted a request for arbitration instituting proceedings against the Republic of Türkiye ("Türkiye" or the "Respondent"; together with the Claimant, the "Parties") under the Agreement between the Government of the Republic of Türkiye and the Government of Malta concerning the Reciprocal Promotion and Protection of Investments (the "Türkiye- Malta BIT" or the "Treaty").

2. On 27 June 2025, the Respondent filed an Application for expedited dismissal of Claimant's claims pursuant to ICSID Arbitration Rule 41 (the "Rule 41 Application").

3. On 18 July 2025, the Tribunal held the first session with the Parties and then issued Procedural Order No. 1 on 22 July 2025.

4. On 8 September 2025, the Claimant filed its Response to Respondent's Rule 41 Objection.

5. On 7 October 2025, the Tribunal denied the Respondent's Rule 41 Application.

6. On 1 April 2026, in accordance with the revised procedural calendar of 3 March 2026, the Claimant filed its Memorial on the Merits.

7. On 1 July 2026, the Respondent filed its Identification of Preliminary Objections and Request for Bifurcation (the "Request").

8. On 29 July 2026, the Claimant filed its Response to the Request (the "Response").

9. Having considered the Parties' submissions, the Tribunal issues this Procedural Order No. 3, setting out its decision on the Request.

II. THE PARTIES' POSITIONS

A. The Respondent's position

1. Introduction

10. The Respondent requests that the Tribunal bifurcate the proceedings and decide its objections to (i) the admissibility of the claims based on abuse of process (the "Admissibility Objection"), and (ii) the Tribunal's jurisdiction ratione materiae (the "Jurisdictional Objection") in a preliminary phase separate from the merits. Türkiye submits that the record as it stands makes bifurcation imperative, and that deciding these objections as a preliminary matter would be highly efficient because the arbitration would end if either one of the objections succeeds.1 While the Respondent divides its first objection in two, both being based on abuse of process but deriving from different transactions, the Tribunal finds it more expedient to analyze the two abuse objections together.

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B. The Claimant's position

1. Introduction

18. The Claimant asks the Tribunal to deny the Respondent's request for bifurcation, arguing that it fails at every level of the relevant analysis and that bifurcating the Respondent's preliminary objections would undermine rather than serve procedural efficiency.

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IV. DECISION

38. For the foregoing reasons, the Tribunal decides as follows:

i. The Respondent's request for bifurcation is denied;

ii. The proceedings shall continue in accordance with Scenario 2 entitled "Request for bifurcation filed but denied" of the revised procedural calendar of 3 March 2026;

iii. Costs are reserved for a later stage of the proceedings.

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Footnotes omitted