FAQ

What is the status of the Sulu case?

The Government of Malaysia is engaged in a fight for justice around the world in order to overturn the $14.9 billion arbitration award that was issued in February 2022. Malaysia completely rejects the award and does not recognize its legitimacy. Litigation is ongoing at this stage in France, Spain, the Netherlands, and Luxembourg.

On 6 June 2023, the Paris Court of Appeal upheld Malaysia’s challenge against the Partial Award rendered on 25 May 2020 by Mr. Gonzalo Stampa. This means that the Partial Award has no standing in France, and the so-called Final Award will now likely be annulled in France as a matter of due process.

In November 2023, the Paris Courts oversaw the withdrawal of the measures registered by the long-defunct Sultanate of Sulu on diplomatic buildings owned by Malaysia in Paris, France. The Paris enforcement judge quashed its prior exparte order authorising that a statutory mortgage be registered on three diplomatic buildings owned by Malaysia in Paris. The Paris enforcement judge also recorded the Claimants’ withdrawal from the proceedings they had initiated to seize the aforementioned diplomatic buildings.

How did the case start?

The matter centers on the Malaysian state of Sabah and a colonial agreement dating back to 1878. Historically, the Sulu Sultanate was present in the Philippines and a small area of territory in Sabah.

During the 19th Century, southeast Asia was subject to colonial powers vying for territorial control across the region. In 1878, an agreement was signed by the Sultan and two merchants, Baron de Overbeck, and Alfred Dent. It saw the Sultan grant and cede his land and territory in North Borneo. In 1903, after Spain renounced all claims to the territory, the Sultan confirmed the cession to the British North Borneo Company and the annual cession payment increased to 5,300 local dollars, which is around US$1,200 today.

In 1936, the Sultan of Sulu, Jamalul Kiram II, died and the payment was ceased as the rightful and legal heir to the Sultan could not be determined. In 1939, the High Court of the State of North Borneo (Chief Justice Macaskie) identified the heirs of the Sultan of Sulu were entitled to receive payment under the 1878 Agreement (“Macaskie Judgment 1939”).

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, however, it inherited the 1878 colonial agreement. Payments were made for many years by Malaysia under the agreement to supposed heirs as determined by the Macaskie Judgement. 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 decisively and logically action in response to a threat to its security, eliminating any possible connection between Government money and attacks on its soil.

Several years later, after failing in a request to ask the UK Foreign Office to preside over the case, the supposed heirs of the Sultan of Sulu began legal action in Spain with a Notice of Arbitration. It declared, among other things, that:

- Malaysia had breached the 1878 agreement

- Malaysia must pay the Sulu claimants damages reflective of the value of the supposed territories and renegotiate the 1878 agreement for future revenues from the territory.

Matters have been ongoing since then.

Who are the Sulu claimants?

The eight Sulu claimants are said to be the descendants of so-called Sultan Jamalul Kiram II of Sulu, who died in 1936.
The Government of Malaysia 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:
- 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
On 6 April 2023, following an investigation, the Ministry of Home Affairs issues an Anti-Money Laundering, Anti-Terrorism Financing, and Proceeds of Unlawful Activities Order against Fuad A. Kiram. The Order cites Mr. Kiram’s participation in and commission of a terrorist act, evidenced by his connection to the Royal Sulu Forces (RSF).

No efforts have yet been undertaken by European courts to determine the identity and legitimacy of the supposed Sulu claimants.
There are also a number of individuals who are said to be descendants of the Sultan who are not involved with this claim

What is Malaysia’s response to the claim and the arbitration award?

Malaysia disputes the case brought by the Sulu claimants on several grounds. In brief:

a) There was no arbitration clause in the 1878 agreement, so the case cannot be the subject of international arbitration.

b) Even if there was an eligible arbitration clause, Malaysia has at no stage waived its sovereign immunity, and therefore the arbitration process is illegitimate.

c) Malaysian courts have exclusive jurisdiction to hear any dispute concerning the 1878 Agreement (as per the decision of a Malaysian Court).

d) The Spanish Courts determined in June 2021 that the appointment of the arbitrator, Dr. Stampa, was null and void due to procedural irregularity. All actions taken by the arbitrator is also deemed null and void.

e) The claimants have based their claim on a disputed translation of the 1878 agreement, and the rightful translation, as submitted by Malaysia, confirms that the Sulu Sultanate agreed to cede their territory to the British, as opposed to lease.

f) The claimants submit that they should be compensated a sum based on the total economic output of Sabah, an entire region of Malaysia. In fact, the so-called Sultan of Sulu only controlled a very small portion of Sabah, and there can be no legitimate claim to the entire output of Sabah

How does this case relate to the 2013 armed invasion of Sabah?

Payments to the so-called Sultanate of Sulu under the 1878 agreement were terminated after an armed invasion of Sabah, launched from the Sulu Archipelago under the orders of self-proclaimed Sultan Jamalul Kiram III, in 2013.

The invasion, also known as the Lahad Datu incursion, saw 73 people killed.

The incident began when 235 militants arrived by boats at Lahad Datu in Sabah.

The group, calling themselves the "Royal Security Forces of the Sultanate of Sulu and North Borneo", was sent by Sultan Jamalul Kiram III. He stated that their objective was to assert the territorial claim of the Philippines to eastern Sabah.

The Malaysian Police Force and military defeated the militants, and the Royal Security Forces have been declared a terrorist organization by the Government of Malaysia. 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 the security of Sabah remains a critical priority. Eastern Sabah Security Command (ESSCOM) ensures the protection of the region thanks to specialist sea, air, and land units.

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Who is funding the Sulu claimants?

The claimants are bankrolled by a global litigation fund, Therium. This means that the eight individuals are financed by the deep pockets of a global business that operates to profit on the success of a case they’ve invested in. This includes paying for the lawyers acting on the case for the Sulu claimants in Manila and London. It is unclear as to whether Therium, or the claimant’s legal advisors, have undertaken due diligence into the true identity of Sulu claimants and their connections to the so-called Sulu Sultanate. It has been reported that Therium has already sunk over $10mn into the claim, and will be hoping to extract from the Government of Malaysia millions of dollars. Malaysia does not know whether Therium is providing financial support directly to the claimants.

Who is Dr. Gonzalo Stampa?

Dr Gonzalo Stampa is a Spanish lawyer who was initially appointed in March 2019 as the Sole Arbitrator of the Sulu claim by the Spanish Superior Court of Justice. The Government of Malaysia does not recognize his appointment and did not participate in the arbitration process that he presided over.In June 2021, following an application by Malaysia, the Superior Court ofJustice of Madrid instructed Dr. Stampa to close the proceedings immediately and vacate his appointment. Dr. Stampa did not comply, and moved the seat of the arbitration to France. It is not clear why Dr. Stampa acted in defiance of the Spanish Court and continued with the arbitration process.

He is now the subject of criminal proceedings in Spain over his actions, and in February 2023, his annulment as the arbitrator of the Sulu case was confirmed by the Spanish Constitutional Court.

As has been reported, Mr Stampa has also subsequently been indicted by the Spanish Public Prosecutor and a Madrid Investigative Court for contempt of court because he wilfully and knowingly disobeyed the repeated orders of the High Court of Justice of Madrid that were binding on him and were communicated to him on six occasions.

Mr Stampa has been indicted for unqualified professional practice (a crime that Malaysia did not include in its complaint against Mr Stampa lodged in December 2021), because according to the Spanish Public Prosecutor following the annulment of his appointment he had no title to act in such capacity.

Mr Stampa is formerly a partner of the firm B. Cremades y Asociados for13 years. B. Cremades y Asociados is the firm acting for the Filipino citizens in Spain and in the purported arbitration. Mr Stampa was paid over USD 2,700,000 for his participation in the case, which is one of the largest amounts paid to a sole arbitrator for any European arbitration proceedings.

The criminal trial of Dr Stampawill commence on 11 December 2023.

Why did it Malaysia not respond to the initial arbitration process?

The Government of Malaysia did not recognize the appointment of Dr. Stampa as the arbitrator in 2019, and did not participate in the arbitration process that he subsequently presided over. Malaysia has at no stage waived its sovereign immunity. In addition, as confirmed by the High Court of Sabah and Sarawak, Dr Stampa had no jurisdiction over the case.

What is the relevance of the letter sent by Malaysia’s former Attorney General, Tommy Thomas, to the claimants in September 2019?

The former Attorney General’s letter has no bearing on the Government of Malaysia’s response to the Sulu claim. The letter was issued without the authority of Cabinet, and Malaysia has at no stage recognized the legitimacy of the claim.

Who would benefit from the enforcement of the arbitration award?

The beneficiaries would be the eight individual claimants and the litigation fund, Therium, that is backing them. It would see the claimants become extremely wealthy individuals, to the detriment of the Malaysian people – with the award equivalent to 16% of Malaysia’s yearly budget. The Government of Malaysia is therefore determined to fight the award to prevent any form of compensation from reaching them.

Have the Sulu claimants’ seized assets belonging to the Government of Malaysia?

The Sulu claimants have attempted to seize assets in the Netherlands, France, and Luxembourg, however thanks to legal action from the Government of Malaysia these efforts have either been unsuccessful or have been stayed.

Malaysia is continuing to protect its assets from seizure by the claimants through appropriate defensive action. The Government of Malaysia refuses to be held to ransom.

On 6 November 2023, The Paris Court of Appeal revoked its order which granted the Claimants’ request to place a statutory mortgage on Malaysian properties in France. On 9 November 2023, the Claimants withdrew seizure over three Malaysian-owned diplomatic properties in Paris, including the Malaysian Embassy.

Should international investors be concerned about the case?

The Sulu claim has no bearing on the attractiveness of Malaysia as a leading foreign direct investment destination, and demonstrates the Government’s commitment to ensuring international law, and in particular global arbitration processes, are not abused. Malaysia has recently been brought together through a coalition government and looks forward to continued economic development for the benefit of all Malaysians.

Why has Malaysia submitted police reports on the so-called Sulu claimants and their representative, Paul H. Cohen?

Malaysia is continuing to pursue all legal avenues to ensure that its rights under international law are protected. It is also the Government’s duty to ensure that those responsible for this sophisticated abuse of the international arbitration process are held to account through mechanisms under the rule of law.

The Government has therefore submitted police reports, which will trigger a formal police investigation, into both the Filipino citizens and Mr Paul H. Cohen, the claimants’ legal representative.

These measures are in response to the extraordinary actions of the claimants and their legal representatives, which have threatened the sovereignty and security of Malaysia; and in regard to Mr Cohen, who has made patently false, and serious, allegations against the Attorney General of Malaysia.

The Government of Malaysia will continue to take all necessary actions including legal actions to put an end to the so-called Sulu claim and to ensure that Malaysia’s interests, sovereign immunity and sovereignty are protected at all times.