THE Malaysian government completely rejects the purported final award of US$14.92 billion (RM62.5 billion) to be paid to the so-called descendants of the last sultan of Sulu, Sultan Jamalul Kiram II.

A joint statement issued by the Foreign Ministry and the Attorney-General’s Chambers today also said the government did not participate in the purported arbitration proceedings that led to the award.      

Moreover, the subject matter of the claim was not commercial in nature, thus cannot be subjected to arbitration.

Furthermore, the claim was based on an 1878 agreement between Sultan Mohamet Jamal Al Alam, the sultan of Sulu at the time, and Baron de Overbeck and Alfred Dent that contained no arbitration agreement. 

The statement said under the 1878 agreement, the sultan granted and ceded in perpetuity the sovereign rights over certain territories located in North Borneo, now forming part of Sabah. 

“We further stress that the claimants’ identities are doubtful and have yet to be verified,” it said.

According to media report, a French arbitration court on Monday ruled that Malaysia had violated a treaty signed in 1878 and ordered to pay at least US$14.92 billion to the descendants of the last Sulu sultan. 

The award was issued by Spanish arbitrator Gonzalo Stampa on February 28. The arbitration process originated in Spain, then moved to Paris where the final award was made.

Last June 29, upon application by the Malaysian government, a nullification decision was made when the Madrid High Court decided that the service of notice of the proceedings for appointment of arbitrator for purposes of the claim was not properly served on Malaysia in accordance with peremptory international rules and Spanish law.  

The statement said as a consequence of the nullification decision, Stampa is not an arbitrator in the purported arbitration proceedings and, therefore, all his decisions, including the final award, were null and void.

The claimants, in an attempt to circumvent this nullification decision, without the Malaysian government’s knowledge, proceeded to obtain an ex parte order from the Tribunal de Grande Instance in Paris, France (“exequatur order”) to recognise the partial award on jurisdiction rendered by Stampa on May 25, 2020 (which had been previously annulled as a consequence of the nullification decision).

“On the basis of the exequatur order, Stampa changed the seat of the arbitration to Paris, France to render the final award,” the statement said.

The Malaysian government will continue to take all necessary actions, including legal action, to put an end to the claim and to ensure that Malaysia’s interests, sovereign immunity and sovereignty are protected and preserved at all times. – Bernama, March 2, 2022.