The case dates back to the Sulu Sultanate’s historical presence in the Philippines and a portion of Sabah, Malaysia.
It centers on an 1878 colonial agreement where the Sultan of Sulu ceded in perpetuity North Borneo (today’s Sabah) to merchants, Messrs Gustavus Baron von Overbeck and Alfred Dent. The merchants agreed to an annual cession payment of RM5,000 to the legitimate heirs of the Sulu Sultanate. In 1903, the cession was affirmed to the British North Borneo Company.
In 1936, Sultan Jamalul Kiram II died and the payment was ceased as the rightful heirs to the Sulu Sultanate could not be determined. In 1936, the High Court of the State of North Borneo identified the heirs of the Sultan of Sulu who were entitled to the cession payment (“the Macaskie Judgement 1939”).
In 1962, Sabah exercised self-determination and joined Malaysia in 1963. The Malaysian Government has never recognized the legitimacy of the self-proclaimed Sultanate of Sulu.
The 1878 agreement, inherited by Malaysia, involved payments to the supposed heirs of Sultan Jamalul Kiram II until 2013.
Payments ceased after a violent armed invasion of Sabah in 2013, ordered by the self-proclaimed Sultan Jamalul Kiram III. The deadly attack, resulting in 78 casualties, prompted Malaysia to terminate payments, taking decisive action against a security threat.
The ‘Royal Sulu Forces’ behind the 2013 armed invasion is now designated a terrorist group by the Malaysian Government, emphasizing the ongoing priority of security in Sabah.
In April 2023, the Malaysian Ministry of Home Affairs classified Fuad A. Kiram as a terrorist for his participation and commission of a terrorist act and close affiliation with the Royal Sulu Forces.
The eight Sulu claimants claim to be the descendants of so-called Sultan Jamalul Kiram II of Sulu, who died in 1936. The Malaysian Government understands that they are all Philippine nationals. However, there is very little information about their identity or their true relation to the Sultan which remains under question. The names of the claimants are:
The claimants receive funding from a global litigation funder, Therium. This means that the eight individuals are financially supported by a well-funded global business that aims to profit from the success of cases in which they invest. This funding covers the legal expenses incurred by the lawyers representing the Sulu claimants in different ongoing proceedings all over the world.
It remains uncertain whether Therium or the Claimants’ legal advisors have conducted due diligence on the true identity of the Sulu Claimants and their connections to the self-proclaimed Sulu Sultanate. Reports indicate that Therium has already invested over $20 million in the claim, anticipating substantial returns from the Government of Malaysia. Malaysia is unaware of whether Therium is directly providing financial support to the Sulu Claimants.
On 6 June 2023, Malaysia won a landmark victory in the Paris Court of Appeal successfully challenging the partial award issued on 25 May 2020, by Dr. Gonzalo Stampa. This verdict overturns the exequatur of the partial award in France and confirms that Malaysia never submitted to arbitration. It also renders the purported final award invalid for any purpose and signals its potential annulment. Malaysia is actively pursuing a swift recording of the annulment in a court decision, anticipating the unravelling of the Claimants’ global enforcement endeavours.
On 27 June 2023, Malaysia achieved another significant victoryin the Hague Court of Appeal. The court upheld Malaysia’s challengeagainst the recognition and enforcement in the Netherlands of the alleged FinalAward illegitimately issued by Dr. Gonzalo Stampa on 28 February 2022, inParis.
The Hague court’s decision was unequivocally based on three grounds:
On 9 November 2023, an enforcement judge in Paris officially documented the Claimants’ withdrawal of their request for seizure on three Malaysian-owned diplomatic properties in Paris, linked to the $14.92 billion arbitration dispute. Following the Court of Appeal Decision in June, which upheld the Malaysian government’s challenge against the partial award issued by the arbitrator on 25 May 2020, the withdrawal of the claim against the Paris properties ensued. The judge mandated the Claimants to pay €15,000 to Malaysia as additional costs, in addition to the €100,000 ordered by a Paris Court of Appeal earlier in the year.
On 11 December 2023, Dr. Stampa, the sole arbitrator responsible for issuing the so- called Final Award against the Government of Malaysia, faced a criminal trial in Madrid. He was accused of two crimes: continuing disobedience and aggravated intrusiveness for publicly attributing himself the role of an arbitrator.
In a landmark decision on 22 December 2023, the Madrid Criminal Court sentenced Dr. Stampa to six months imprisonment and a one-year ban from practicing as an arbitrator. This was due to his knowing and blatant disobedience of clear rulings and orders from the Madrid High Court of Justice.