Annulment Of Sulu Award May Not Extinguish Claim Entirely

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It was heartening to note recent media reports quoting law and institutional reform minister Azalina Othman Said as saying that the Sulu claim “will end when the arbitration award is annulled”.
Unfortunately, the facts of the case, coupled with past omissions on the part of the government in the matter, risks compromising sovereign rights and may prolong the dispute.
One ongoing jurisprudential difficulty is that the Sulu award, purported to have been issued based on a convention relating to the enforcement of foreign arbitral awards, often referred to as New York Convention 1958 (NYC 1958), does not guarantee that the annulment of the award in one country will make it unenforceable in another.
I have written an article on the Sulu award, highlighting our shortcomings and the way forward. I will not repeat my contentions here, save for one issue involving public and private international law which needs to be addressed for the benefit of the general public.
I have long had an interest in arbitration, culminating in my conceptualisation of the “University cum Court Annexed Arbitration”.
That idea originated from my childhood days in India, during which I observed how village elders settled all forms of civil, commercial and criminal complaints, as well as family law matters, especially those relating to divorce and custody, using the Panchayat methodology. The penghulu system in ancient Malaya appears to have been its near equivalent.
The procedure for getting the Panchayat, a village council, to hear a complaint was simple.
An oral complaint would be made to the village head. If he finds it has merit, he will direct the village usher to notify all villagers of the complaint and the date and time when the Panchayat panel will hear the dispute.
The usher would then walk through the village beating a drum and make sure that every household is informed. Villagers are invited to attend and provide any useful information for the Panchayat to consider before it makes its decision.
If the Panchayat decision – which will be delivered on the same day – is not followed by the losing party, the villagers will disassociate themselves from the loser and his family. They will also be denied access to common facilities such as the community’s well, cemetery and place of worship.
That would make it impossible for any recalcitrant party to survive in the village, ensuring expeditious justice and effective enforcement of the decision, at no cost.
As long as the Panchayat has not breached the rules of natural justice, its decision or award will be enforceable through the courts by the fiat of a Privy Council decision handed down in the 1930s.
In very much the same way, a decision which satisfies the requirements set out in the NYC 1958 can be enforced in more than 170 signatory countries to the convention. This is provided the courts of the state where the enforcement is sought are satisfied that the award is good in law and can be enforced against any asset held in that country by the losing party.
The reality is that, in an arbitration, even a decision reached in a coffee shop which complies with all legal prerequisites is capable of enforcement.
Likewise, a civil or commercial matter filed in our courts can also be moved, even to coffee shops, under the “party autonomy” concept, and a valid and enforceable award can be issued under the Malaysian Arbitration Act 2005.
Thus, both international and domestic arbitration have been simplified by the NYC 1958 read with the UNCITRAL Model Law 1985, which has now been adopted in many countries.
The net effect is that civil and commercial disputes in the large majority of cases can be moved out of the court system if all countries accept an affordable arbitration model under the concept which I have put forward or a modified version of it.
For the same reasons, the Sulu award, although not one issued by a court of competent jurisdiction, acquires through the convention a more supreme status than a court judgment.
The government should have known that from the very outset.
Regrettably, it appeared too cavalier in its initial approach to the case. Its failure to properly defend or oppose the claim from its very inception has resulted in a waste of public funds in belated efforts to deal with the repercussions that followed.
Meanwhile, other problems may yet surface.
Questions have arisen in the media as to whether a 2019 letter issued by a former attorney-general has compromised the sovereign status of the state of Sabah without due process of law. Another question to be considered is whether that letter must be expunged via a court process.
Some of these issues are presently being litigated in the Kota Kinabalu High Court.
Questions also arise as to whether the approval and consent of Malay rulers was necessary for any of the alleged concessions made to be valid in law. This is because the rulers have been empowered by our constitution to safeguard the rule of law as well as the security and territorial integrity of the nation.
In my opinion, it is incumbent on public interest bodies to study the case thoroughly and, if necessary, move a petition to the rulers as per their oaths of office to take appropriate action to protect Malaysia’s sovereign rights.
The nation must avoid a similar fate as befell Pedra Branca. - FMT
The views expressed are those of the writer and do not necessarily reflect those of MMKtT.

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