KUALA LUMPUR – Two of Petronas’ subsidiaries in Luxembourg have been seized by the authorities there as part of the award obtained by the heirs of the now defunct Sulu sultanate in a French arbitration tribunal in March.
Speaking to the Financial Times, lawyers representing the Sulu claimants said Luxembourg bailiffs had seized Petronas Azerbaijan (Shah Deniz) and Petronas South Caucasus last Monday.
The companies managed Petronas’ interests in Azerbaijan and was reportedly worth US$2 billion (RM8.87 billion).
The seizure is part of the award issued by a French arbitration court totalling US$14.9 billion to the heirs of the defunct Sulu sultanate.
This final award was based on the supposed violation of the 1878 agreement between Sultan Jamal Al Amam, Baron de Overbeck, and the British North Borneo Company’s Alfred Dent.
London-based lawyer Elizabeth Mason, who represents the claimants, said her client’s demand is based on a written contract that Malaysia is obliged to fulfil.
“This case is the history of colonialism.
“Unlike so many dispossessed, our clients have an ongoing contract since 1878 and, as such, have a path to justice where many others did not,’’ she was quoted as saying.
In the British report, Mason’s co-counsel, Paul Cohen, also urged Malaysia to honour the agreement or risk being shunned by the international community.
“International law doesn’t let you pick and choose. Either Malaysia honours its international obligations or it goes ‘full Russia’.
“We hope Malaysia will see the cost of being a legal pariah state and come to terms.”
Both counsels have indicated that they would pursue more state assets if a resolution was not reached.
Speaking to the news publication was also prominent arbitration lawyer, Colin Ong, who said the case had proceeded in an unusual manner as there was no set precedent based on the 1958 New York Convention on international arbitration, of which Malaysia is a signatory.
“It is very unusual... (it involves) an agreement predating the formation of a country,” said Ong.
In the March ruling, Malaysia was given three months to pay the award or risk paying interest as well.
In the same month, Putrajaya filed an application to nullify the final award.
The Foreign Ministry and Attorney-General’s Chambers (AGC) had also issued a statement saying the Malaysian government does not recognise the claim.
In a joint statement, 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 waived its sovereign immunity.
The subject matter of the claim, they said, is not commercial in nature and thus cannot be subject to arbitration, while also noting that the 1878 Agreement contains no arbitration agreement.
Meanwhile, the AGC was reported as commenting that it is in the midst of going through the case of the seized assets.
“The AGC has just been informed and is looking into the matter,” Attorney-General Tan Sri Idrus Harun was quoted as saying by New Straits Times.
The Vibes is trying to reach representatives from Petronas for comment. – The Vibes, July 12, 2022
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