Naftiran Intertrade Co (“<span class="news-text_medium">NICO</span>”) Ltd commenced arbitration against the Kingdom of Bahrain under the Malaysia–Bahrain bilateral investment treaty (“<span class="news-text_medium">BIT</span>”). NICO alleged that two Bahraini banks had blocked and refused to transfer its deposited funds, amounting to a politically motivated expropriation.
NICO had re-domiciled from Jersey to Labuan, Malaysia, on 4 January 2012 during the restructuring of an Australian mining group. In December 2014, it was unable to secure a corporate secretary because of international sanctions. It then obtained a Certificate of Continuation in Gambia through the iCommerce Registry and was removed from the Labuan register.
The parties’ experts agreed the Gambian registration was never valid. NICO subsequently registered in Nevis in August 2016. In March 2018, the Labuan High Court declared the purported Gambian transfer invalid and restored NICO to the Labuan register (the “<span class="news-text_medium">2018 Decision</span>”).
Bahrain contended that NICO did not hold Malaysian nationality between December 2014 and March 2018 (the “<span class="news-text_medium">Absence Period</span>”) and the 2018 Decision could operate only prospectively. The tribunal rejected both submissions.
Under section 133(4) of the <span class="news-text_italic-underline">Labuan Companies Act 1990</span> (“<span class="news-text_medium">LCA</span>”), a transfer required a valid instrument executed by a proper officer of the receiving jurisdiction. The iCommerce Registry was not recognised by the Gambian government. As a result, no valid instrument of transfer existed.
The tribunal further held section 133(5) of the LCA preserved a company’s legal personality despite removal from the register. Non-compliance with continuing obligations under the LCA attracted only financial penalties and did not affect NICO’s corporate status.
The tribunal found no misrepresentation capable of undermining the 2018 Decision. That decision confirmed NICO had never validly departed from Labuan. Accordingly, recognising its effect did not infringe the intertemporal principle: NICO’s Malaysian nationality had never been lost as a matter of Malaysian law.
Bahrain also objected that NICO’s 2012 re-domiciliation constituted an abuse of process. The tribunal rejected the objection, finding the predominant purpose of the re-domiciliation was legitimate.
On temporal jurisdiction, the tribunal held the BIT did not apply retrospectively. The claimant had to possess the relevant nationality at the time of each alleged breach. The tribunal therefore excluded claims founded on conduct before 4 January 2012 and acts occurring before the BIT entered into force.
The tribunal dismissed Bahrain’s preliminary jurisdictional and admissibility objections by majority. The dissenting arbitrator did not issue a separate opinion.
The decision illustrates the importance of the applicable company law when determining an investor’s nationality for treaty purposes. A purported cross-border continuation that is legally ineffective may not interrupt nationality, even if the company is removed from a corporate register. The ruling also confirms a re-domiciliation undertaken for a legitimate predominant purpose will not necessarily amount to impermissible treaty shopping, whilst treaty protection remains subject to the temporal limits of the relevant BIT.
<span class="news-text_medium">Case:</span> <span class="news-text_italic-underline">Naftiran Intertrade Co (NICO) Ltd v Kingdom of Bahrain</span>, ICSID Case No. ARB/22/34, Decision on Preliminary Objections, 15 June 2026 (Dr Claus von Wobeser, President; Dr Eduardo Silva Romero, appointed by the claimant; Professor Dr Maxi Scherer, appointed by the respondent).
