Malaysia has secured another court victory in its dispute with purported heirs of the defunct Sulu sultanate, with a Paris court nullifying a US$14.9 billion (about RM66.4 billion) claim against the country. The ruling effectively cancels an arbitrator’s order demanding the payment from Malaysia.
Sulu Claim Dismissed by Paris Court of Appeal
The Malaysian government’s Sulu Special Secretariat War Room announced yesterday that the Paris Court of Appeal fully annulled the arbitrator’s order. Malaysia believes this victory will halt “baseless attempts” to extract money and assets from the country, according to a statement from the secretariat.
The court confirmed the arbitrator lacked jurisdiction, finding no valid arbitration agreement binding Malaysia to the claim. The claimants have been ordered to pay €200,000 (about RM957,000) in legal costs to Malaysia.
The dispute originated from proceedings initiated by eight individuals claiming to be heirs of the Sulu sultanate. They sought billions of US dollars in compensation related to Sabah, citing a colonial-era agreement.
The claimants argued an 1878 deal involved the Sulu sultanate “leasing” Sabah to a British company in exchange for annual payments. Malaysia maintains the agreement involved the sultanate ceding all rights and powers over Sabah for those payments.
Arbitrator’s Authority Challenged
Gonzalo Stampa was initially appointed, and later revoked by a Spanish court, as arbitrator before issuing two decisions. On May 25, 2020, he issued a “partial award” asserting his jurisdiction. He subsequently moved the case to France.
On February 28, 2022, Stampa issued a “final award,” ordering Malaysia to pay US$14.9 billion to the claimants. However, two French courts previously rejected the partial award, determining Stampa had no valid basis for assuming jurisdiction.
On June 6, 2023, the Paris Court of Appeal refused to recognize or enforce the partial award, again citing the lack of a valid arbitration agreement. The French Supreme Court dismissed the claimants’ challenge to that ruling on November 6, 2024.
More information on the timeline of events in the case is available here.
Malaysia stated it remains prepared to defend itself in any future legal challenges brought by the claimants.
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