Malaysia Sulu case

Last updated
Heirs to the Sultanate of Sulu v. Malaysia
Court Court of Cassation
DecidedFebruary 28, 2022
Case history
Prior actions
Appealed to Court of Appeal of Paris then Court of Cassation
Subsequent action
  • French courts held that Arbitrator lacked jurisdiction over the case (July 2023, November 2024)
Related actions
  • Government of Malaysia v Nurhima Kiram Forman & Ors (2020) – High Court in Sabah and Sarawak
  • Nullification of Sampa's appointment (2021) – Madrid High Court
Case opinions
Decision by Court of Cassation

The Malaysia Sulu case is an international legal dispute in which persons claiming to be heirs of the Sultanate of Sulu made claims against the government of Malaysia by way of arbitration. The claims were subsequently litigated in the Spanish, French, and Dutch court systems. [1] Malaysia obtained a final victory in the French Court of Cassation on 6 November 2024. [2]

Contents

Background

The North Borneo dispute arose from an agreement between the now defunct Sultanate of Sulu and the British North Borneo Company (BNBC) in 1878. Under the agreement the Sultan of Sulu either ceded or leased land in North Borneo to the BNBC, which agreed to pay the Sultan and his heirs an annual fee. [3] [a]

After its formation in 1963, Malaysia, [5] as the successor to the BNBC, paid the heirs of the Sulu Sultanate an annual fee until the 2013 Lahad Datu standoff. [3] Persons claiming to be Sulu heirs claimed that they were not involved with the standoff and sought arbitration. [6]

Case history

Case in Madrid

The Sulu heirs started an ad hoc arbitration process regarding the 1878 agreement in Spain on 30 July 2019. Malaysia did not consent to the arbitration process, insisting that the proper venue to resolve the dispute was the Courts of Malaysia, Malaysia being the successor to the British Colonial administration in the relevant territory. [7]

In December 2019, the Government of Malaysia commenced proceedings to stop the arbitration. [8]

The Malaysian Government argued that the dispute must be resolved in accordance with the Deed of Cession, which provided as follows: “In case of any dispute shall arise between His Highness the Sultan, his heirs or successors and the said Gustavus Baron de Overbeck or his Company it is hereby agreed that the matter shall be submitted to Her Britannic Majesty’s Consul-General for Borneo.” [9] Malaysia contended that, as it is the successor to the former British administration in the relevant territory, its courts must be the forum for resolution of the dispute.

Gonzalo Stampa accepted an appointment as arbitrator in the case, but Malaysia did not consent to this appointment. On 25 May 2020, Stampa granted a partial award to the Sulu heirs. The Madrid High Court in June 2021 annulled Stampa's appointment due to failure to properly notify Malaysia about the case. Malaysia, as noted above, challenged arbitral jurisdiction. [10]

Move to Paris and final award

After the Order of the Court in Madrid, Stampa moved the seat of the arbitration to Paris, in an attempt to circumvent that order. In February 2022, Stampa issued an award holding that Malaysia owed the Sulu heirs $14.92 billion. [11]

Malaysian appeal and assets seizing attempt

Malaysia obtained a favorable ruling from the Court of Appeal of Paris on 6 July 2023, holding that the arbitrator had no jurisdiction over the dispute. Malaysia had previously obtained a stay order to prevent the enforcement of the final award in the French court system. [10]

The Sulu heirs made failed attempts to enforce the award against Malaysian assets in France, the Netherlands, and Luxembourg. [12]

On 6 November 2024, the Cour de Cassation of France dismissed an appeal by the Sulu heirs, finding in favour of Malaysia. [2]

Sampa criminal case

The arbitrator, Gonzalo Stampa, faced a criminal charge of "unqualified professional practice" in Spain in December 2023. [13] Stampa was found guilty of contempt of court and was sentenced by the Spanish courts to six months in prison together with a ban from practising as an arbitrator for a year. [14] On 17 May 2024, the Madrid Court of Appeal upheld the Madrid Criminal Court's 2023 judgement finding Stampa guilty of contempt of court. [15]

Claimants

According to the Malaysian government, the following are the alleged heirs involved in the Sulu case, said to be Phillipine citizens: [16]

Reactions

Malaysia viewed the claim by the Sulu heirs as a violation of its sovereignty, seeking arbitration without its consent. [17] Sampa and the Sulu heirs have been criticized for forum shopping. [10]

In mid-2023, Malaysian parliament member Khlir Mohd Nor, who believes that the Philippine government was involved in the 2013 Lahad Datu standoff alleged that the Philippine government was involved in the Sulu case. Prime Minister Anwar Ibrahim who had met with Philippine President Bongbong Marcos said that the Philippine government is not involved in the Sulu case and reiterated Malaysian policy of not entertaining claims on the sovereignty over Sabah. [17]

Malaysia welcomed the Cour de Cassation's ruling as a "historic victory". [2]

Notes

  1. ↑ There is a dispute whether this is a cession or a lease fee. Malaysia interprets it as the former, while the Philippines, which lays territorial claim to North Borneo, treats it as the latter. [4]

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References

  1. ↑ Beattie, Elizabeth (7 July 2023). "Fresh from 'Sulu case' win, Malaysia's law minister turns to domestic reforms". The Japan Times. Retrieved 15 December 2023.
  2. 1 2 3 https://www.reuters.com/world/sultans-heirs-fail-with-bid-challenge-french-ruling-dispute-with-malaysia-2024-11-06/
  3. 1 2 "Malaysia stopped paying cession money to Sulu Sultanate in 2013". New Straits Times. 23 July 2020. Retrieved 15 December 2023.
  4. ↑ "'Sabah is not in Malaysia': When Locsin awakens a sleeping giant". Rappler. 7 August 2020. Retrieved 15 December 2023.
  5. ↑ "Sabah: A Timeline". Philippine Daily Inquirer. 31 July 2020. Retrieved 15 December 2023.
  6. ↑ "Malaysia wins appeal against partial award in $15 billion claim by sultan's heirs". Reuters. 7 June 2023. Retrieved 15 December 2023.
  7. ↑ "Blow to the Philippine claim". Daily Express. Sabah Publishing House Sdn. Bhd. 2 June 2020. Retrieved 15 December 2023.
  8. ↑ https://hsfnotes.com/arbitration/2020/05/20/malaysian-high-court-grants-first-anti-arbitration-injunction-on-the-grounds-of-sovereign-immunity/
  9. ↑ Borneo High Court in Government of Malaysia v Nurhima Kiram Fornan & Ors (Originating Summons No. BKI-24NCvC-190/12-2019 (HC2))
  10. 1 2 3 Strangio, Sebastian (7 June 2023). "Malaysia Wins Court Battle Over $15 Billion Sulu Heirs Award". The Diplomat. Retrieved 15 December 2023.
  11. ↑ "French court rules Malaysia owes $14.92 billion to sultan of Sulu's heirs". Philippines Daily Inquirer. The Star, Asia News Network. 2 March 2022. Retrieved 15 December 2023.
  12. ↑ Van den Berg, Stephanie; Latiff, Rozanna (27 June 2023). "Dutch court rules sultan's heirs cannot seize Malaysian assets". Reuters. Retrieved 15 December 2023.
  13. ↑ "Sulu Case: Malaysia Hope Madrid Court Will Sentence Stampa For Unqualified Professional Practice". Bernama. 12 May 2023. Retrieved 15 December 2023.
  14. ↑ Sallehuddin, Qistina (9 January 2024). "Sulu Case: Spanish arbitrator Stampa found guilty of contempt of court". New Straits Times . Archived from the original on 10 January 2024. Retrieved 28 May 2024.
  15. ↑ "MADRID COURT OF APPEAL CONFIRMS SULU ARBITRATOR GONZALO STAMPA'S CONVICTION FOR CONTEMPT OF COURT". Ministry of Foreign Affairs Malaysia. 17 May 2024. Archived from the original on 28 May 2024. Retrieved 28 May 2024.
  16. ↑ "FAQ". Malaysia Sulu Case. Retrieved 15 December 2023.
  17. 1 2 "Malaysia PM Anwar says Philippines has nothing to do with Sulu heir claims". South China Morning Post. 14 June 2023. Retrieved 15 December 2023.
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