KUALA LUMPUR, June 6 — The purported Sulu sultanate’s heirs may no longer legally pursue their claim for US$14.9 billion in compensation over Sabah following Malaysia’s landmark court victory in France today, according to Datuk Seri Azalina Othman Said.
Azalina said Malaysia’s victory at the Paris Court of Appeal in France today will ultimately mean that the Sulu claimants’ US$14.9 billion compensation award from an arbitration cannot be enforced against Malaysia.
“Malaysia trusts that today’s decision of the Paris Court of Appeal will put an end to the efforts of the claimants and their funder, Therium, to enforce the unlawful awards and thereby extract windfall damages from Malaysia,” the minister in the Prime Minister’s Department in charge of law and institutional reform said in a statement today.
The Sulu claimants had previously made attempts to seize assets belonging to Malaysia or Malaysian entities in Luxembourg, France and the Netherlands to enforce the US$14.92 billion arbitration award, but Malaysia has been fighting such efforts through the courts.
Previously, eight citizens of the Philippines, who claimed to be heirs of the defunct Sulu sultanate, had filed for arbitration proceedings in Spain to seek for billions of US dollars from Malaysia over Sabah.
A court in Madrid, Spain had in March 2019 appointed Gonzalo Stampa to be the arbitrator for the Sulu claimants’ case, but the same Spanish court later in June 2021 annulled or cancelled his appointment as arbitrator.
On May 25, 2020, Stampa made what is known as the “partial award” in the Sulu claimants’ arbitration case.
In his May 2020 partial award, Stampa dismissed Malaysia’s objections against the arbitration, deciding that he has the jurisdiction to be the arbitrator in the Sulu claimants’ case and that Madrid, Spain will be the arbitration venue.
When Spain cancelled his appointment as the Sulu case’s arbitrator, Stampa decided to continue to be the arbitrator and changed the arbitration venue to France instead, before proceeding on February 28, 2022 to give the “final award” in the arbitration process by ordering Malaysia to pay US$14.9 billion to the Sulu claimants.
Azalina today described Stampa’s transferring of the arbitration proceeding from Spain to France — in defiance of the Spanish court orders instructing him to stop acting as arbitrator in the Sulu case — as an “unprecedented move”, and claimed it had resulted in a significant abuse of the international arbitration process.
With the Paris Court of Appeal today upholding Malaysia’s challenge against Stampa’s May 2020 “partial award” (where Stampa said he could be the arbitrator), Azalina said this court decision means the Sulu claimants cannot seek to enforce the “final award” (where Stampa ordered Malaysia to pay US$14.9 billion) which Stampa gave in France in the arbitration.
“The decision means that the Claimants cannot rely on the sham award in France for any purpose. The Paris Court of Appeal found that the arbitrator wrongly upheld his jurisdiction,” Azalina said.
“This decision, which is final and binding, is a decisive victory for Malaysia in its ongoing pursuit of legal remedies, which Malaysia is confident will result in comprehensive defeat for the claimants and their funders,” she added.
Azalina said the Sulu claimants have previously targeted Malaysia’s diplomatic assets in France — including parts of the Malaysian embassy — by relying on the partial award.
She said the Sulu claimants must now withdraw their efforts to take these assets following the Paris Court of Appeal’s decision today that refused to give effect to the partial award in France.
Azalina said the court decision in France today is expected to lead to the cancellation of the US$14.9 billion arbitration award against Malaysia, and that this is also expected to end the Sulu claimants’ efforts to seize Malaysia-linked assets throughout the world.
“Importantly, this decision implies that the Paris Court of Appeal will annul the purported ‘Final Award’ in which Mr. Stampa remarkably awarded close to USD 15 billion to the claimants.
“Malaysia is seeking to have the annulment recorded in a court decision as soon as possible, which should lead to the collapse of the Claimants’ global enforcement efforts to date,” she said.
Azalina, who also chairs Malaysia’s special secretariat on the Sulu claimants’ case, took the opportunity to thank Prime Minister Datuk Seri Anwar Ibrahim for his continued support and unwavering trust in the secretariat’s ongoing effort to uphold Malaysia’s position.
She also expressed gratitude to Foreign Minister Datuk Seri Zambry Abdul Kadir, Communications and Digital Minister Fahmi Fadzil, the attorney-general, the Sabah state government, the Attorney-General’s Chambers, the Malaysian embassy in France, the relevant ministries and agencies and all other parties involved.
“The government of Malaysia will continue to take all necessary actions including legal actions to put an end to the claims and to ensure that Malaysia’s interests, sovereign immunity and sovereignty are protected at all times,” she said.