Nurhima Kiram Fornan and others v. Kingdom of Spain

Case summary

At a glance

Parties: Nurhima Kiram Fornan, Fuad A. Kiram, Sheramar T. Kiram, Parmaisuli Kiram-Guerzon, Taj-Mahal Kiram-Tarsum Nuqui, Jenny K.A. Sampang and Widz-Raunda Kiram Sampang (nationals of the Philippines, members of the Royal Family of Sulu) v. the Kingdom of Spain
Case no.: ICSID Case No. ARB/24/45
Forum and rules: ICSID Convention arbitration; ICSID Arbitration Rules 2022
Treaty: Philippines–Spain BIT of 1993
Tribunal: Prof. Gabrielle Kaufmann-Kohler (President), Prof. Dr. Stephan Schill, Prof. Alexis Mourre
Sector: Arbitral award; lease of territory in North Borneo; legal services
Outcome: All claims dismissed under Rule 41 as manifestly without legal merit for lack of an investment in Spain (6 November 2025).
Amount: Claimed: the full value of the Final Award against Malaysia, with interest, about USD 18 billion. Awarded: nothing. The Claimants bear their own costs and pay Spain's share of the Tribunal's fees and ICSID costs and Spain's legal costs; the amounts are redacted in the published Award. Spain's claim for interest on costs was dismissed.

The dispute

The Claimants, who say they are the successors of the Sultan of Sulu, claimed payments from Malaysia under the 1878 Agreement leasing territory in and around North Borneo. Malaysia stopped paying in 2013. At their request the Tribunal Superior de Justicia de Madrid (TSJM) appointed Dr. Gonzalo Stampa as sole arbitrator in 2019. The TSJM annulled that appointment in June 2021 for defective service on Malaysia. Dr. Stampa then moved the seat to Paris and in February 2022 issued a Final Award against Malaysia now worth about USD 18 billion with interest; Spanish courts later convicted him of desobediencia. The Claimants alleged that Spain's conduct breached fair and equitable treatment and full protection and security and amounted to a denial of justice. Spain objected under Rule 41 that the Claimants manifestly had no investment in Spain under Article 1(1) of the BIT.

Key holdings

Standard under Rule 41: a claim is dismissed if the claimant has no tenable legal basis for it, assuming the facts alleged are proven. The threshold is high, but a novel legal theory is not immune from early dismissal. ¶¶ 60–64
Money spent on legal fees in the Spanish court proceedings is an expenditure, not an asset, and so cannot be an investment under Article 1(1) of the BIT. Any right to legal services was not the asset to which the dispute relates. The same applies to fees paid to the arbitrator and to Spanish court fees. ¶¶ 81–85
The interest in the Final Award is not an investment by "crystallization". That theory requires the underlying transaction to be an investment in the host State, and the 1878 Agreement concerned land now in Malaysia, not Spanish "territory" as defined in the BIT; historical colonial territory does not count. Legal expenses cannot be the original investment, and ATA v. Jordan does not help the Claimants. ¶¶ 87–93
Even if the interest in the Final Award were an investment, it is not located in Spain. Spain was not a party to the 1878 Agreement or to the ad hoc arbitration, the award was issued with the seat in France, and the Spanish courts' assistance in appointing the arbitrator and the arbitrator's nationality are insufficient connections. ¶¶ 94–97
The dismissal does not depend on unsettled debates about crystallization. Full proceedings would not change the legal result, so there is no breach of due process. Because Spain had not consented to arbitrate the dispute, the Tribunal did not need to decide whether there was an investment under the ICSID Convention. ¶¶ 98–101
Costs follow the event. The Claimants bear their own costs and pay Spain's share of the Tribunal's fees and ICSID costs and Spain's reasonable legal costs. Spain's claim for interest on costs was dismissed because it was not substantiated. ¶¶ 107–110

Procedural history

15 August 2024ICSID receives the Request for Arbitration, which was supplemented on 21 August and on 10 and 11 September 2024. The Award gives the date of registration as 24 October 2025.
19 March 2025Tribunal constituted when the President accepts her appointment.
2 May 2025Spain files its objection under Rule 41 for manifest lack of legal merit.
16 June 2025Claimants file their Response to the Rule 41 Objection.
16 July 2025Hearing on the Rule 41 Objection by videoconference.
6 November 2025Award: all claims dismissed under Rule 41; costs awarded to Spain.

Tribunal, counsel and experts

Decided by: Gabrielle Kaufmann-Kohler President — appointed by the parties jointly
Stephan W. Schill Co-arbitrator — appointed by the claimant
Alexis Mourre Co-arbitrator — appointed by the respondent
For the claimant: 4-5 Gray's Inn · Aránguez Abogados
For the respondent: General State Attorney's Office