[UPDATED] M’sia does not recognise RM63 bil claim by Sulu sultanate heirs

KUALA LUMPUR – Following the RM63 billion claim made by the descendants of the now defunct Sulu sultanate, the Foreign Affairs Ministry and Attorney General’s Chamber (AGC) have issued a statement saying the Malaysian government does not recognise the claim.

In a joint statement today, both the ministry and AGC said that Malaysia did not participate in the purported arbitration proceedings.

They said Malaysia has always upheld and has never waivered its sovereign immunity.

The subject matter of the claim, they said, is not commercial in nature and thus, cannot be subject to arbitration, and the 1878 Agreement contains no arbitration agreement.

“We further stress that the claimants’ identities are doubtful and have yet to be verified.”

On Monday, Spanish news website La Información reported that Spanish arbitrator Gonzalo Stampa had issued an award of RM62.59 billion in an arbitration court in Paris, France.

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. 

The article said 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. 

Malaysia now has three months to pay up or risk paying interest following the order.

On January 14, 2020, the Sabah High Court rendered judgement against the claimants, who are the descendants of the Sulu Sultan, where the court also declared the 1878 Agreement does not contain any arbitration agreement. 

“The Sabah High Court rendered judgement against the claimants and declared that the 1878 Agreement does not contain any arbitration agreement, that Malaysia had never waived its sovereign immunity, that the arbitrator had no jurisdiction to resolve the matter and that the Sabah Court is the natural and proper forum to determine any claim in connection with the 1878 Agreement. 

“The Government of Malaysia has also filed for the recognition and enforcement of the Sabah High Court decision in the Spanish High Court of Justice of Madrid, but the application has yet to be heard,” they added. 

On June 29, 2021, upon application by the Malaysian government, the Spanish High Court of Justice of Madrid decided that the service of notice of the proceedings for appointment of arbitrator for purposes of the claim was not properly served to Malaysia in accordance with peremptory international rules and Spanish law (the “Nullification Decision”). 

Both the ministry and AGC said it is also inconsistent with the High Court of Justice of Madrid’s case laws on service of process in sovereign states. 

“As a consequence of the Nullification Decision, Stampa is not an arbitrator in the purported arbitration proceedings and, therefore, all his decisions, including the Final Award, are null and void. 

“The Government of Malaysia completely rejects the purported Final Award dated February 28, 2022, which was rendered by Stampa.”

In an attempt to circumvent the nullification decision, they said, the claimants proceeded to obtain an ex parte order (Exequatur Order) from the Tribunal de Grande Instance in Paris, France on May 25, 2020 without the knowledge of the Malaysian government.  

As a result, Malaysia has filed an appeal against the order in the courts in Paris, whereby it had successfully obtained an ex parte order dated December 16, 2021 to suspend the effects of the order and barring the claimants from relying on it. 

“In violation and defiance of this Suspension Order, the Claimants maintained that the Exequatur Order was in force and that a final award should be rendered with a seat set in Paris, France. 

“Stampa upheld the Claimants’ request, in disregard for the suspension of the effects of the Exequatur Order,” both said. 

They then said that the action by the arbitrator on Monday not only violated Malaysia’s sovereign immunity, but was also rendered in disregard of the Madrid and Paris court decisions. 

In that regard, they said that the Spanish Public Prosecutor has filed a criminal complaint against Stampa in the purported arbitration proceedings as well as all his illegal decisions and awards.  

“The Criminal Court N. 40 of Madrid has subsequently started a criminal investigation in connection with the illegal actions of Stampa.  

“The Government of Malaysia will continue to take all necessary actions, including legal actions, to put an end to the Claim and to ensure that Malaysia’s interests, sovereign immunity and sovereignty are protected and preserved at all times,” they said. – The Vibes, March 2, 2022