Will Sulu heirs return to ‘shop’ in Malaysia?

IN “Heirs of the Sultan of Sulu were forum shopping and abusing the legal processes”, I wrote that the Sulu heirs were ‘forum shopping’ when they “flew more than 10,000km to Madrid in Spain to move the Superior Court of Justice there to appoint a sole arbitrator in the Spanish arbitration. Then they hopped to France for so-called arbitration proceedings.”

Despite the Paris Court of Appeal granting a stay order of the US$15 billion (RM68.7 billion) final award against Malaysia for prejudice against sovereign rights, the Sulu heirs, through their lawyer, have demanded the Malaysian government make immediate payment of the final award, which now amounts to US$16.412 billion (including 10% interest) together with US$3.5 million in counsel and expert fees and US$4.03 million in arbitration costs.

But lawyers know that any award such as the final award cannot be obtained by a letter of demand. It is not binding and enforceable in Malaysia unless recognised as binding and be enforced by making it a judgment by the High Court in Malaysia.

The legal term used is recognition and enforcement of a foreign arbitration award. In Malaysia, it is governed by section 38 of the Arbitration Act 2005.

Under section 38 of the Arbitration Act 2005, the High Court may recognise and enforce awards where the seat of arbitration is in Malaysia or, in the case of a foreign arbitration award like the final award, where the award is from a state that is a contracting party to the New York Convention.

Malaysia adopted the convention on November 5, 1985. It is an international agreement entered into by 168 contracting states to honour parties’ agreement to arbitrate disputes and to recognise and enforce arbitration awards granted in other contracting states.

France is a contracting state.

An application for recognition and enforcement of a foreign arbitration award from a contracting party of the convention can be made at the High Court pursuant to order 69 of the Rules of Court 2012.

The application may be made by the party enforcing the arbitration award without giving notice to the other party to the award. However, the High Court retains the discretion to require the enforcing party to serve a copy of the application on the other party.

So, were the Sulu heirs giving prior notice to the Malaysian government by their letter of demand dated May 28, which was received by the Attorney-General’s Chambers the following day?

A foreign arbitration award, like the final award, can be recognised and enforced in Malaysia. The party enforcing the award will have to appoint a Malaysian law firm for legal advice and to file an application at the High Court for its recognition and enforcement.

Will the Sulu heirs return to Malaysia to continue their “shopping” after Luxembourg? – June 4, 2023.

* Hafiz Hassan reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.

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