French Supreme Court rejects Sulu sultan’s heirs appeal against Malaysia

PETALING JAYA: France’s highest civil court has rejected an appeal lodged by self-proclaimed descendants of the Sulu sultanate over an award of nearly US$15 billion, drawing a line under a years-long legal battle with Malaysia.

The Filipino heirs of the last Sultan of Sulu won a US$14.9 billion award in a French arbitration court in 2022 in a long-running dispute over a colonial-era land deal, prompting them to go after global assets belonging to the Malaysian government and state-owned companies.

A Paris court later upheld the Malaysian government’s challenge against enforcing a partial award, with France’s Supreme Court today confirming the decision, reported Reuters.

Law and institutional reform minister Azalina Othman Said welcomed the “momentous victory” for the rule of law, which she said would help preserve the sanctity of international arbitration as an alternative form of dispute resolution.

“This important decision means that the initial basis for the sham ‘final award’ that ordered Malaysia to pay US$15 billion is not recognised under French law,” she said in a statement.

“The Paris Court of Appeal will now proceed, in due course, to annul the so-called ‘final award’ rendered by arbitrator Gonzalo Stampa and will definitively settle the matter in favour of the Malaysian people.”

In May, the Madrid Court of Appeal upheld a December 2023 ruling by the Madrid criminal court that found Stampa guilty of contempt of court, confirming his six-month prison sentence and one-year ban from practising as an arbitrator.

Stampa, who had controversially ordered Malaysia to pay US$14.9 billion to the self-claimed heirs of the defunct Sulu sultanate, was charged last December with contempt of court and unqualified professional practice for defying a Madrid court’s decision to annul the Sulu claimants’ case.

The charges were brought by the Spanish public prosecutor’s office, with the Malaysian government as the complainant. Although Stampa had previously been appointed as the arbitrator in the case, the High Court of Justice in Madrid annulled his judicial appointment in June 2021.

However, he continued to hear the case, moving his seat of arbitration to Paris, and in February 2022 instructed Putrajaya, via a French arbitration court, to make the payment to the purported descendants of the last Sultan of Sulu.

Stampa ruled that Malaysia had violated an 1878 agreement between the old Sulu kingdom in the Philippines and a representative of the British North Borneo Company that used to administer what is now Sabah.

Under the agreement, the then Sultan of Sulu, Sultan Jamal Al Alam, ceded sovereignty over large parts of Sabah to Baron de Overbeck, the then maharaja of Sabah, and British North Borneo Company’s Alfred Dent.

In exchange, de Overbeck and Dent agreed that they and their future heirs were to pay the heirs of the sultan 5,000 Mexican dollars annually.

In 1936, the last formally-recognised Sultan of Sulu, Jamalul Kiram II, died without heirs, and payments temporarily ceased until North Borneo High Court chief justice Charles F Macaskie named nine court-appointed heirs in 1939.

Malaysia took over these payments when it became the successor of the agreement following Sabah’s independence and the formation of Malaysia in 1963.

Putrajaya ceased the payments, equivalent to RM5,300 a year, in 2013 after a deadly incursion by armed men into Lahad Datu, along the eastern coast of Sabah.