The Government of Malaysia is battling an international arbitrationaward that threatens the sovereignty and security of the country.
In February 2022, eight individuals that claim to be the descendantsof the so-called Sultan of Sulu, Jamalul Kiram II, received an award of $14.9bnagainst the Government of Malaysia.
Over 16% of Malaysia’s yearly budget is at stake. Malaysia completely rejects the award, does not recognise its legitimacy, and is litigating across Europe to ensure that the award is overturned.
In June 2023, Malaysia secured landmark victories in the Paris Courtof Appeal and The Hague Court of Appeal. These court decisions ensure that the sham award cannot be relied upon in France or the Netherlands for any purpose.
The Sulu Sultanate was present in the Philippines and a small area of territory in the Malaysian region of Sabah. The legal dispute centers on a colonial agreement dating back to 1878, signed by the then Sultan of Sulu, Baron de Overbeck, and Alfred Dent. The agreement saw the Sultan of Sulu grant and cede his land and territory in North Borneo, in today’s Sabah, to the merchants. An amount of 5,000 dollars (local currency at the time) was agreed upon as cession money. In 1903, the Sultan of Sulu confirmed the cession of certain lands to the British North Borneo Company.
In 1962, the people of Sabah exercised their right to self-determination and joined the Federation of Malaysia when it was formed in 1963. The Government of Malaysia has never recognized the legitimacy of the so-called Sultanate of Sulu.
The 1878 agreement was inherited by Malaysia and payments were made under the agreement to supposed heirs of Jamalul Kiram II, who died in 1938, in line with a 1939 judgment from the High Court of the State of North Borneo.
The payments were terminated in 2013 after a violent armed invasion of Sabah, launched from the Sulu Archipelago, under the orders of the self-proclaimed Sultan Jamalul Kiram III, which saw 73 people killed. The Government took decisive and logical action in response to a threat to its security, eliminating any possible connection between Government money and attacks on its soil.
The ‘Royal Sulu Forces’ responsible for the 2013 attack have since been designated a terrorist group by the Government of Malaysia, and the preservation of security in Sabah remains a critical priority.
Several years later, the resulting claim brought by the supposed Sulu heirs in relation to the 1878 agreement was forum-shopped around Europe, after initial failure in the United Kingdom. The named claimants in the case are:
- Nurhima Kiram Fornan;
- Fuad A. Kiram;
- Sheramar T. Kiram;
- Permaisuli Kiram – Guerzon;
- Taj – Mahal Kiram – Tarsum Nuqui;
- Ahmad Nazard Kiram Sampang (deceased, 2023);
- Jenny K.A. Sampang; and
- Widz – Raunda Kiram Sampang
After appointing Dr. Gonzalo Stampa as the arbitrator for the case, the Spanish courts subsequently annulled his role and ordered him to cease his action. Dr Stampa then moved the process to France. Malaysia did not participate in the subsequent arbitration process overseen by Dr. Stampa, who is now subject to the criminal complaint, and has at no stage waived it's sovereign immunity to such proceedings.
The award then issued in France in February 2022 is in breach of decisions in the Malaysian High Court and the High Court of Justice of Madrid. The Paris Court of Appeal has also issued a stay order on the award. Despite these court orders, attempts to enforce the award by the Sulu claimants have seen Malaysian entities across Europe come under attack, including diplomatic buildings and state-owned companies, as Therium and eight mysterious individuals seek to line their pockets at the expense of the Malaysian people.
On 6 June 2023, Malaysia won a landmark victory in the Paris Court of Appeal.
The Court upheld Malaysia’s challenge against the partial award rendered on 25 May 2020 by Mr. Gonzalo Stampa and it means that the Claimants cannot rely on the sham arbitration award in France for any purpose. The decision also implies that the Paris Court of Appeal will annul the purported “Final Award”.
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.
On 27 June2023, Malaysia won another landmark victory in the Hague Court of Appeal. The Court upheld Malaysia'’s challenge against the recognition and enforcement in the Netherlands of the purported Final Award rendered illegally by Dr. Gonzalo Stampa on 28 February2022 in Paris.
This decision was unequivocally made based on the following three grounds:
(i) no Final Award could have been lawfully rendered due to the annulment of Dr. Gonzalo Stampa'’s appointment as arbitrator by the same Spanish court that appointed him;
(ii) no valid arbitration agreement exists so no arbitration procedure could have legally taken place to begin with; and,
(iii) the exceptional stay of enforcement of the purported Final Awardin Paris is a further ground for refusal which renders the sham award incapable of recognition and enforcement in The Netherlands.