Friday 23 Feb 2024
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KUALA LUMPUR (July 13): The Paris Court of Appeal (CoA) on Tuesday (July 12) allowed Malaysia’s application for a suspension order to temporarily halt the enforcement of an arbitration ruling in favour of the "heirs" of the Sulu Sultanate in the US$14.9b legal dispute between both parties, said Minister in the Prime Minister's Department (Parliament and Laws) Datuk Seri Wan Junaidi Tuanku Jaafar.

In a statement Wednesday, the de facto law minister said the arbitration ruling was not supposed to be enforced in any countries until a final decision is made by the Paris Court in relation to the government’s application to cancel such ruling, of which hearing dates have yet to be determined.

“The Suspension Order is the result of various legal actions taken by the government of Malaysia since the (Sulu Sultanate's heirs') claim was filed to end all claims and ensure that Malaysia's interests, sovereign immunity and sovereignty remain protected and preserved,” he said.

Wan Junaidi said the decision by the Paris CoA on Tuesday was made on the basis that the arbitration ruling rendered by arbitrator Gonzalo Stampa will compromise Malaysia’s sovereign immunity.

The said arbitration ruling, dated Feb 28, resulted in two of Petroliam Nasional Bhd’s Luxembourg-registered subsidiaries being served with seize orders on Monday, as the claimants sought to enforce the ruling.

“On July 11, 2022, two subsidiaries of Petronas in Luxembourg were notified of the enforcement of the final award (from the arbitration ruling) through a notice issued by [the] Luxembourg Court. Petronas as a company will take necessary legal action to defend its position under the law,” said Wan Junaidi.

Wan Junaidi reiterated that the government has never recognised these claims and has never set aside the country’s sovereign immunity as a sovereign nation.

The legal dispute emerged after the “heirs” and “successors-in-interest” to Sultan Jamalul Kiram II initiated a claim against the government of Malaysia through an international arbitration proceeding in Madrid, Spain.

The claim is based on an agreement Sultan Mohamet Jamal Al Alam, the Sultan of Sulu at the time, and Baron de Overbeck and Alfred Dent entered into in 1878, under which the Sultan of Sulu granted and ceded in perpetuity the sovereign rights over certain territories located in North Borneo, now forming part of Sabah, Malaysia.

As a token, RM5,300.00 per annum was to be paid to the then Sultan of Sulu, his heirs or successors. According to a March statement by Malaysia's Ministry of Foreign Affairs and Attorney General’s Chambers, such payment was ceased in 2013 following the Lahad Datu armed invasion.

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