KUALA LUMPUR (June 6): The Paris Court of Appeal has upheld Malaysia's challenge against the partial award rendered on May 25, 2020 by Gonzalo Stampa in the case brought by eight citizens of the Philippines, purportedly the heirs of the long-defunct Sultan of Sulu.

This decision implies that the Paris Court of Appeal will annul the purported “Final Award” in which Stampa awarded close to US$15 billion (RM69 billion) to the claimants, said Minister in the Prime Minister's Department (Law and Institutional Reform), Datuk Seri Azalina Othman Said.

She said Malaysia is seeking to have the annulment recorded in a court decision as soon as possible, which should lead to the collapse of the claimants’ global enforcement efforts to date.

The decision also means that the claimants cannot rely on the sham award in France for any purpose, said Azalina in a statement on Tuesday (June 6).

“The Paris Court of Appeal found that the arbitrator (Stampa) wrongly upheld his jurisdiction," she said. “This decision, which is final and binding, is a decisive victory for Malaysia in its ongoing pursuit of legal remedies, which Malaysia is confident will result in comprehensive defeat for the claimants and their funders.”

Stampa issued the “final award” despite his appointment having been annulled by the same Spanish court that had previously appointed him, on the basis that Malaysia had not been properly served ahead of that appointment process.

“In defiance of Spanish court orders instructing him to cease acting as arbitrator, in an unprecedented move, Mr Stampa transferred the arbitration proceeding to France and issued his ‘final award’ and Mr Stampa’s sustained actions in defiance of Spanish court orders have resulted in a significant abuse of the international arbitration process,”  said Azalina.

Previously, the claimants targeted Malaysia’s diplomatic assets in France (including part of its embassy) on the basis of this partial award. Malaysia had been fighting these measures on the ground of diplomatic immunity.

The dispute is linked to the Sulu heirs’ years-long claims to the state of Sabah. The then-sultanate had leased Sabah to a British company in 1878 and the Borneo state was later absorbed into Malaysia. The Sulu sultanate ruled the islands in the Sulu Archipelago, which are part of Mindanao in today’s Philippines.

A French Arbitration Court in Paris last year ordered Malaysia to pay the Sulu descendants over their claim. The government filed an application to cancel the award in Paris, while a Luxembourg court set aside the legal action payment in January.

On March 14 this year, the Paris Court of Appeal upheld the stay order obtained by the Malaysian government in France on July 12, 2022, against the enforcement of the award.

Therefore, the suspension order obtained by Malaysia regarding the enforcement of the award is maintained.

“Malaysia trusts that today’s decision of the Paris Court of Appeal will put an end to the efforts of the claimants and their funder, Therium, to enforce the unlawful awards and thereby extract windfall damages from Malaysia,” said Azalina.

She added that the government will continue to take all necessary actions including legal action to put an end to the claims and to ensure that Malaysia’s interests, sovereign immunity and sovereignty are protected at all times.