The $18 billion claim against Spain filed at the ICSID (headquarters pictured) has been overshadowed by the Sulu claimants’ continued pursuit of $15 billion from Malaysia and by the conviction of former arbitrator Gonzalo Stampa. It nevertheless highlights the claimants’ lashing out toward Spain, which had originally provided the forum for their case. Image Source: ICSID

The ICSID decision of November 7, 2025, marked the latest setback in the claimants’ long-running dispute with Malaysia. That arbitral case is expected to reach its final dismissal this December, following a series of defeats that began when Spain annulled the appointment of former arbitrator Gonzalo Stampa, whose rulings consistently aligned with the Sulu claimants’ position.

The claimants, represented by lead counsel Paul Cohen, had argued that the money they spent on legal proceedings in Spain to have the Madrid courts appoint Spanish lawyer Gonzalo Stampa as arbitrator constituted an “investment” protected by the 1993 Spain–Philippines BIT. That treaty was originally signed to encourage and safeguard legitimate cross-border investments between the two countries, such as business ventures and capital projects.

“The claimants, represented by Paul Cohen, argued that the money they spent on legal proceedings constituted an “investment” in Spain.”

Within this framework, the claimants in their filing before the International Centre for Settlement of Investment Disputes (ICSID) said that Spanish authorities had interfered in the courts’ handling of the arbitration against Malaysia, amounting to an injury to their rights as Filipino investors in Spain. They alleged that government influence led to the judicial decisions annulled Mr. Stampa’s appointment as arbitrator, and that the subsequent criminal conviction of Mr. Stampa for his conduct was unjust and excessive, and that the entire process amounted to a denial of justice.

Consequently, the Sulu claimants sought more than $18 billion in damages, a shocking figure that exceeds even the $15 billion arbitral award Stampa had issued before his position was annulled. It appeared that they viewed that earlier award, and the profits it represented, as part of their protected investment under the BIT.

“Sulu claimants sought more than $18 billion in damages, a shocking figure that exceeds even the $15 billion arbitral award Stampa had issued.”

Spain responded by filing a preliminary objection, maintaining that the Sulu claimants had no investment in Spain that could possibly qualify for protection under the BIT. A hearing on this objection was held in July 2025.

The ICSID tribunal—comprising Gabrielle Kaufmann-Kohler (chair), Stephan Schill (appointed by the Sulu claimants), and Alexis Mourre (appointed by the respondents)—would unanimously agree. They concluded that the claimants “manifestly lacked a BIT-protected investment,” emphasizing that “monies disbursed for legal fees are an expenditure, not an asset.”

“The ICSID tribunal ruled: the claimants “manifestly lacked a BIT-protected investment,” emphasizing that “monies disbursed for legal fees are an expenditure, not an asset.”

The tribunal further rejected the notion that the claimants’ alleged monetary interest in the Malaysia arbitration award could be considered an investment, since it was not tied to any economic transaction in Spain’s territory.

The ICSID has ordered the claimants to pay Spain’s legal fees. It remains unclear how much the ill-fated case cost or whether the claimants relied on remaining funds from Therium, the litigation finance firm that had previously bankrolled their multi-jurisdictional campaign. Therium had financed the claimants’ efforts in the Malaysia arbitration and related enforcement attempts, reportedly providing approximately $20 million of dollars in backing.

Legal observers have described the ICSID claim as an extraordinary and perhaps desperate maneuver, noting that the claimants faced almost no realistic prospect of success in suing the Spanish state under a treaty meant for commercial investors. The latest decision highlights how far the campaign has stretched since its origins in a colonial-era cession dispute, moving from challenges against Malaysia to allegations against Spain—the country where their original arbitration briefly began.

Critics argue that the use of the BIT in this way represents a distortion of its intended purpose. Rather than promoting legitimate investment and trade, the case turned the treaty into a vehicle for revisiting unfavorable court outcomes. Analysts warn that such tactics risk undermining the credibility of investment treaties and could inject unnecessary tension into otherwise stable diplomatic relationships between Spain and the Philippines.

“Such tactics risk undermining the credibility of investment treaties and could inject unnecessary tension into otherwise stable diplomatic relationships between Spain and the Philippines.”

This outcome strengthens the perception that the Sulu litigation network is imploding, exhausting its funding and legitimacy after years of opportunistic filings. With support from well-funded lawyers and financial backers, the small group of eight claimants has launched legal actions across multiple countries, generating widespread political and judicial controversy. Now, by targeting Spain—the state whose courts first hosted their arbitration—the campaign has effectively turned against the system that once gave their claims a hearing.

“By targeting Spain—the state whose courts first hosted their arbitration—the campaign has effectively turned against the system that once gave their claims a hearing.”

For Spain, the decision closes an unusual chapter in its recent international litigation history. For the Philippines, it serves as a reminder that its investment treaty with Spain is designed to foster legitimate economic cooperation, not to shield private litigants pursuing unrelated historical claims. And for the Sulu claimants and their legal cabal, the verdict marks yet another defeat in a costly and controversial global campaign that continues to steadily lose ground.

REFERENCES

Bohmer, L. (2025, November 9). Breaking: ICSID tribunal finds that it manifestly lacks jurisdiction over 18-billion-USD treaty claim against Spain. Investment Arbitration Reporter. https://www.iareporter.com

International Centre for Settlement of Investment Disputes. (n.d.). Case detail: ARB/24/45. World Bank Group. Retrieved 2025, November 10 from https://icsid.worldbank.org

KnowSulu. (2025, October 17) Spain’s top court upholds criminal conviction of arbitrator in Sulu case against Malaysia.https://knowsulu.ph

KnowSulu. (2025, July 4). What comes after the July 7 Sabah arbitration ruling? https://knowsulu.ph