Malaysia Strongly Opposes Paying Sulu Descendants

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Putrajaya has voiced strong opposition against an order to pay descendants of the last Sulu sultan a whopping RM62.59 billion.
It has also vowed to challenge the basis of the descendants’ claim, which was over violations of the 1878 agreement signed by Sultan Jamal Al Alam, Baron de Overbeck, and the British North Borneo Company’s Alfred Dent.
Spanish arbitrator Gonzalo Stampa issued the award in an arbitration court in Paris, France on Monday.
In a joint statement this evening, Wisma Putra and the Attorney-General’s Chambers (AGC) regarded the award as a breach of Malaysia’s “sovereign immunity”.
This was due to questions regarding whether Stampa was fit to preside over the case, which they argued rendered the final award “null and void”.
“The final award rendered by Stampa on Feb 28, 2022, not only violates Malaysia’s sovereign immunity but was also rendered in disregard of the Madrid and Paris court decisions.
“The government of Malaysia strongly opposes the final award and upholds its position and stance to not recognise all the actions taken by Dr Stampa in the purported arbitration proceedings as well as all his illegal decisions and awards,” they said.
The two bodies also said Malaysia will be attempting to “end” the descendants’ claim.
“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 added.
Arbitration not recognised
As for why Malaysia was absent from the Paris arbitration, the ministry and AGC explained it was because the government did not recognise the claim in the first place.
It also did not regard the 1878 agreement as a commercial contract and thus argue it should not be subject to arbitration.
“The government of Malaysia does not recognise the claim and did not participate in the purported arbitration proceedings because Malaysia has always upheld and has never waived its sovereign immunity as a sovereign state.
“In addition, the subject matter of the claim 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,” they said.
Those claiming to be the Sulu sultan’s descendants initiated the case in Spain as the 1878 agreement was signed on Spanish soil.
The case was originally heard in Madrid until the Madrid High Court annulled Stampa’s appointment on grounds that Malaysia was not properly informed about the case and was thus “defenceless”.
The case was later moved to the French capital.
Below is the joint statement by the Foreign Affairs Ministry and AGC in full:
The so-called “heirs” and “successors-in-interest” to the Sultan Jamalul Kiram II (“Claimants”) initiated a claim against the Government of Malaysia through an international arbitration proceedings in Madrid, Spain (“the Claim”). The Claim is based on an agreement Sultan Mohamet Jamal Al Alam, the Sultan of Sulu at the time (“Sultan of Sulu”) and Baron de Overbeck and Alfred Dent entered into in 1878 (“1878 Agreement”) under which the Sultan of Sulu granted and ceded in perpetuity the sovereign rights over certain territories located in North Borneo, now forming part of Sabah, Malaysia.
As a token, RM 5,300.00 per annum was to be paid to the then Sultan of Sulu, his heirs or successors. Following the Lahad Datu armed invasion, payment was ceased in 2013.
The Government of Malaysia does not recognise the Claim and did not participate in the purported arbitration proceedings because Malaysia has always upheld and has never waived its sovereign immunity as a sovereign State.
In addition, the subject matter of the Claim 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 14 January 2020 the High Court of Sabah and Sarawak (the “Sabah High Court”), sitting in Kota Kinabalu, 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.
On 29 June 2021, upon application by the Government of Malaysia, 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”).
It is also not consistent with the High Court of Justice of Madrid’s case laws on service of process on sovereign States. As a consequence of the Nullification Decision, Dr. 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 28 February 2022, which was rendered by Dr. Stampa.
Notwithstanding the Nullification Decision of the High Court of Justice of Madrid, the Claimants, in an attempt to circumvent this decision, without the Government of Malaysia’s knowledge, proceeded to obtain an ex parte order from the Tribunal de Grande Instance in Paris, France (“Exequatur Order”) to recognize the Partial Award on Jurisdiction rendered by Dr. Stampa on 25 May 2020 (which had been previously annulled as a consequence of the decision of the Nullification Decision). On the basis of the Exequatur Order, Dr. Stampa changed the seat of the arbitration to Paris, France to render the Final Award.
As a result of the Claimants’ action, the Government of Malaysia had filed an appeal against the Exequatur Order in the Courts in Paris whereby the Government of Malaysia had also successfully obtained an ex parte order dated 16 December 2021 (“Suspension Order”) from the First President of the Paris Court of Appeal suspending the effects of the Exequatur Order in France 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. Dr. Stampa upheld the Claimants’ request, in disregard of the suspension of the effects of the Exequatur Order.
Therefore, it follows that the Final Award rendered by Dr. Stampa on 28 February 2022 not only violates Malaysia’s sovereign immunity but was also rendered in disregard of the Madrid and Paris court decisions.
The Government of Malaysia strongly opposes the Final Award and upholds its position and stance to not recognize all the actions taken by Dr. Stampa in the purported arbitration proceedings as well as all his illegal decisions and awards.
In that regard, the Spanish Public Prosecutor has filed a criminal complaint against Dr. Stampa for serious contempt of court and professional intrusiveness. The Criminal Court N. 40 of Madrid has subsequently started a criminal investigation in connection with the illegal actions of Dr. 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. - Mkini

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