A DUTCH court’s dismissal of an application by Sulu heirs to enforce a US$14.9 (RM69.5) billion arbitration award against Malaysia is likely to have an impact in other jurisdictions, Azalina Othman Said said.

The minister for law and institutional reform said the claim was illegitimate from the start and that the final award was null and void. 

“The claimants cannot rely on the purported final award to attempt to seize Malaysian assets in The Netherlands and the landmark judgment will likely render futile any further illegitimate attempts by the claimants and their funders to enforce it in other jurisdictions,” she said in a statement today. 

Yesterday, a judgment on the court website said: “The court dismisses the requests of the Filipino nationals” to demand the execution of the arbitration award.

Last year, the Sulu heirs were awarded US$14.9 billion by a Paris arbitration court in a long-running dispute with Malaysia over a colonial-era land deal.

In a bid to enforce the award, the heirs sought to seize Malaysian government assets in France, Luxembourg and the Netherlands.

Azalina said the Hague Court of Appeal’s decision signifies progress for Malaysia in its ongoing legal battle to reject the enforcement of the award globally.

“Simultaneously, Malaysia has taken the necessary steps to obtain payment of the cost ordered against the claimants, following the Paris Court of Appeal’s (June 6) decision… upholding Malaysia’s challenge against Dr Stampa’s earlier ‘preliminary award’ on jurisdiction,” she said, referring to controversial Spanish arbitrator Gonzalo Stampa.

Stampa had ordered Malaysia to pay US$14.9 billion to the self-proclaimed heirs of the defunct Sulu sultanate and is facing criminal charges for going against a Madrid court decision to annul the case.

She said the Sulu claim was dismissed because of the annulment of Stampa’s appointment as arbitrator by the same Spanish court that appointed him, which in turn invalidated all of his procedural acts. 

Azalina said the award was also invalid because the original agreement did not have a clause for arbitration.

Further grounds for dismissal was the exceptional stay of enforcement of the Paris award, which rendered the award incapable of recognition and enforcement in the Netherlands, she said. – June 28, 2023.