Thursday 20 Jun 2024
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"This decision confirms the legal position that Malaysia has asserted since the dispute began, effectively ending the claimants’ judicial strategy in Spain.”

KUALA LUMPUR (Feb 2): The Malaysian government made further gains in its legal battle against the self-proclaimed “heirs” of the Sultan of Sulu, with the latest development being the Spanish Constitutional Court rejecting the claimants’ appeal against the annulment of the appointment of the dispute arbitrator, Gonzalo Stampa.

This reinforced a decision on June 29, 2021 by the High Court of Justice of Madrid (HCJM), which issued a ruling to annul the judicial appointment of Stampa to act as an arbitrator for the dispute between the Malaysian government and a group of individuals styling themselves as the “heirs” of the Sultan of Sulu.

“The government has just received official confirmation that the constitutional appeal filed by the claimants has been rejected and that, as a result, the annulment of Mr Stampa’s appointment (which was already final and binding) has also been confirmed by the Spanish Constitutional Court,” said de-factor law minister Azalina Othman Said on Thursday.

The Spanish Constitutional Court rejected the claimants’ constitutional appeal on the grounds that the claimants had withdrawn their claim to appoint an arbitrator following the annulment decision by HCJM in June 2021, said Azalina, minister in Prime Minister’s Department (Law and Institutional Reform).

“As a result, they had voluntarily abandoned the proceedings which served as the basis for their constitutional appeal.

“This decision confirms the legal position that Malaysia has asserted since the dispute began, effectively ending the claimants’ judicial strategy in Spain,” said the Pengerang MP.

The HCJM was the Spanish court that initially appointed Stampa in 2019, and had in June 2021 retroactively invalidated his appointment and nullified all his actions as a purported arbitrator, including his alleged “preliminary award” that he had rendered in favour of the claimants in Madrid.

Azalina said the HCJM’s decision was “final, binding and directly enforceable” and could only be subject to an extraordinary constitutional appeal before the Spanish Constitutional Court if exceptional circumstances were met.

“In fact, the claimants complied with the annulment decision of the HCJM and took steps to appoint a different arbitrator. As a consequence, they recognised that Mr Stampa was not an arbitrator,” she said.

Although the claimants filed a constitutional appeal seeking to overturn the HCJM’s decision on Nov 5, 2021, the appeal did not stay the effects of the annulment decision, said Azalina.

As a result of the annulment of judicial appointment in Spain, Azalina said Stampa lacked the authority to act as an arbitrator and should have immediately put an end to the arbitration proceedings against the Malaysian government.

“Instead, and in open defiance of the June 29, 2021 decision of the HCJM (the same court that had initially appointed him as an arbitrator), Mr Stampa nevertheless chose to deliver an illegal and purported ‘final award’ granting the claimants US$14.92 billion in compensation for the territory of Sabah,” she said.

An ex-parte (single party) arbitration proceeding was initiated by the claimants and held in Paris, but the French courts have since stayed the enforcement of the purported US$14.92 billion final award rendered by Stampa in France, pending the outcome of Malaysia’s action to set it aside, on the basis that enforcement may likely threaten Malaysia’s sovereignty over the territory of Sabah.

This came shortly after the Luxembourg courts had last month set aside the claimants’ request to enforce Stampa’s two purported awards.

“The Spanish courts have now further confirmed the annulment of Mr Stampa’s unlawful appointment as an arbitrator, finding that he never had any legal authority to act in that capacity nor to issue any awards and that therefore they are null and void,” said Azalina.

“This recent decision of the Spanish Constitutional Court vindicates the government’s policy to vigorously defend Malaysia in every court and forum, exercising all its powers, rights and resources to ensure that Malaysia’s interests, sovereign immunity and sovereignty are protected at all times,” she added.

Stampa made two purported arbitral awards in March last year, claiming that Malaysia had reneged on a 144-year-old agreement signed in 1878 by the then Sulu Sultan that granted sovereign rights to parts of Sabah today, in return for an annual token payment of RM5,300.

Malaysia, which had been paying the sum, halted the payment in 2013 during Datuk Seri Najib Razak’s administration following the armed incursion of Lahad Datu by more than 200 militants believed to be linked to the Sulu Sultanate.

Najib’s government claimed the invasion caused a breach of the 1878 agreement, which the heirs disputed.

Putrajaya refused to recognise the legitimacy of the purported arbitration and had sought legal remedies to invalidate Stampa’s appointment and his arbitral awards.

Edited ByLam Jian Wyn
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