KUALA LUMPUR – Minister in the Prime Minister’s Department (Law and Instituional Reform) Datuk Seri Azalina Othman Said has hailed the Hague Court of Appeal’s rejection of an earlier award to the Sulu sultanate to seize Malaysian assets.
“The decision confirms Malaysia’s position that the “sham arbitration” should never have taken place, that it was illegitimate from the start and that the purported Final Award is null and void.
“To that end, the claimants cannot rely on the purported Final Award to attempt to seize Malaysian assets in the Netherlands and today’s (yesterday’s) landmark judgment will likely render futile any further illegitimate attempts by the claimants and their funders to enforce it in other jurisdictions,” she said in a statement.
Azalina, who oversees law and institutional reform in the Prime Minister’s Department, added that this signifies Malaysia’s achievement in its ongoing legal challenge to deprive the enforcement of the purported awards globally, which she described as a threat to the entire international arbitration system.
Simultaneously, the Malaysian government has taken the necessary steps to obtain payment of the cost ordered against the claimants, following the Paris Court of Appeal’s decision of June 6, 2023 upholding Malaysia’s challenge against Spanish arbitrator Gonzalo Stampa’s earlier “Preliminary Award” on jurisdiction.
Stampa had in late February reportedly issued an award of RM62.59 billion in an arbitration court in Paris.
The order to pay the claimants was due to the so-called violation of the 1878 agreement signed between Sultan Jamal Al Alam, Baron de Overbeck, and the British North Borneo Company’s Alfred Dent.
Malaysia stopped paying the Sulu heirs their RM5,300 cession money in 2013, following the Lahad Datu armed incursion. According to a report by the Spanish news website La Información, Stampa ruled that the 1878 treaty constituted a commercial “international private lease agreement” and that Malaysia breached the agreement by not paying the cession money.
’Stampa’s procedural acts invalidated’
Recapping the Hague Court of Appeal’s decision, Azalina stressed that it was unequivocally made based on the following three grounds:
1) No Final Award could have been lawfully rendered due to the annulment of Stampa’s appointment as arbitrator by the same Spanish court that appointed him, which in turn invalidated all of his procedural acts. Thus no arbitral award exists that could be capable of recognition and enforcement. The arbitral tribunal was moreover not properly constituted since the appointment of Stampa was annulled, which leads to the rejection of the claimants’ request.
2) No valid arbitration agreement exists so no arbitration procedure could have legally taken place to begin with. It cannot be established that the parties intended to settle disputes by arbitration; even if they did, the alleged clause referred to by the claimants is in any event dysfunctional and cannot be relied upon.
3) The exceptional stay of enforcement of the purported Final Award in Paris is a further ground for refusal which renders the “sham award” incapable of recognition and enforcement in The Netherlands, she said. – The Vibes, June 28, 2023
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