Malaysia says will fight legal action by late Sultan's heirs to seize assets


KUALA LUMPUR – Malaysia on Friday (Sept 30) said it will challenge a move by the heirs of a former Southeast Asian sultan to seize its Dutch assets as part of the descendents’ efforts to enforce a $15 billion (S$21 billion) arbitration award against the Malaysian state.

The heirs of the former Sulu sultan on Thursday asked a Dutch court for permission to seize Malaysian assets in the Netherlands, where some of Malaysia’s biggest companies have operations – including state oil firm Petronas.

The heirs are targeting Malaysian assets overseas following the government’s refusal to recognise the $15 billion arbitration award by a French court in February, which found it had reneged on a 1878 land leasing agreement between a British company and the last sultan of Sulu.

Malaysia has said it does not recognise the heirs’ claim and that the arbitration, in which it did not participate, was illegal.

Malaysia obtained a stay on the ruling pending an appeal, but the award remains enforceable outside France under a United Nations treaty on international arbitration.

“Malaysia will spare no expense in defending its sovereignty and its assets abroad wherever they may be situated,” law minister Wan Junaidi Tuanku Jaafar said in a statement.

He said Malaysia would take legal action in the Netherlands to “resist and set aside” any attempt to seize assets, and that the country has initiated a global strategy to proactively challenge other possible seizure bids.


A spokesperson for the heirs did not have an immediate comment.

Wan Junaidi also said Petronas’ assets were not assets of the government of Malaysia.

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“It would be an abuse of the process of any court to seek enforcement against such assets,” he said.

The Malaysian government is the sole shareholder of Petronas and collects an annual dividend from the oil firm.

Petronas did not have an immediate comment on the government statement. It has not commented on the heirs’ court petition in the Netherlands.

In July, two Luxembourg-based subsidiaries of Petronas were seized by court bailiffs as part of the heirs’ effort to claim the award.

Petronas has described the Luxembourg seizure as “baseless” and vowed to defends its global assets.



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