Written by: Averroes
History
Malaysia will never recognise the recent arbitration award as well as any territorial claims onto Sabah. The award was reportedly issued in France to allow the so-called heirs of Sulu to receive USD$14.92 billion or RM62 billion to the Sulu dynasty for violating the 1878 treaty.
The arbitration was said to be initiated by the heirs and successors of the last legally recognised Sultan Jamalul Kiram II through an international arbitration proceeding in Madrid, Spain. They were represented by London-based lawyers, Paul Cohen and Elisabeth Mason.
The 1878 treaty was a 'cession deed' between the Sultan of Sulu (Sultan Mohamet Jamal Al Alam) and Bardon de Overbeck and Alfred Dent. This cession deed gave sovereign rights of territories of North Borneo (today Sabah) to the foreigners or colonisers under the British crown in perpetuity.
The cession monies amounted to 5000 Malay Dollars. The colonisers wanted Sabah to exploit minerals and forest products under their control in return for the said annual payments. It was not a pawn or lease. The Malay word 'pajak' is interpretted to mean cession.
Until today, the 1878 treaty is still effective when Sabah formed Malaysia with Malaya and Sarawak. Malaysia had to pay RM5,300 annually to the family, heirs or successors. However, Malaysia stopped paying after Lahad Datu was invaded by the Sulu army in 2013.
Technically, Malaysia did breach the treaty, but the dispute should be brought in Malaysia between the Malaysian government and the defunct Sulu Sultanate only.
Repercussions
If the award were to proceed, it would wreak havoc in Sabah and the rest of Malaysia. It would also damage bilateral relations between Malaysia and the Philippines. The denial of the award, Malaysia and the army and police as well as other defence authorities must prepare for any incursions by the illegitimate Sulu army.
Even if the Sulu family were to receive the RM62 billion, the Philippine government would surely confiscate it off their hands as it may be used to finance separatists movement in the South, especially in Mindanao or the Bangsamoro area spearheaded by Nur Misuari.
If the award were hypothetically tenable, Malaysia may have the option to refuse payment, but would have to surrender or seize her assets globally as we are a member of the New York Convention, among 167 signatories around the world, which allows for the enforcement of arbitral awards.
Malaysia and the Philippines must resolve the issue rather than adding fuel to the flame. The Philippines should drop their claims over Sabah immediately and stop politicking by growing more political sentiments and propaganda to attract more voters in the elections.
Malaysia should also respond by treating Filipino OFW fairly and stop all forms of discrimination. More businesses and trade between the two countries with similar culture and history should be encouraged, since both countries inter-marry and have family ties.
Legal reasons
Here are the following five (5) reasons why the claims by the Sulus are not valid. The reasons herein are also based on the case of Government of Malaysia vs Nurhima Kiram Fornan & Ors (Originating Summons No BKI-24NCvC-190/12-2019 (HC2)).
The case concerned Malaysia restraining the claimants through injunction when they attempted to bring arbitration for their territorial claims over Sabah through a Spanish ad hoc arbitration.
(1) Firstly, the 1878 Treaty is purely an agreement within Sabah, Malaysia only. Its jurisdiction does not extend to foreign courts or arbitration. Nowhere in the 1878 Treaty mentions any forum or arbitration outside Malaysia.
The 'Her Britannic Majesty's Consul-General for Borneo' could not be interpretted as an arbitration agreement as that forum no longer exists. Therefore, if the Sulu family has any beef, they should bring the action in Sabah only.
Spain does not have jurisdiction over Malaysia, as we are a free and independent nation. This is what Kota Kinabalu High Court judge Martin Idang said. Hence, forum non conveniens.
Also, a case in 1939, the High Court of North Borneo of Dayang Dayang Haji Piandao Kiram of Jolo, Philippines & 8 Others v The Government of North Borneo & Others, Civil Appeal No: 02(i)-83-09/2018(W) also decided that the Sultan of Sulu acknowledged that there was no arbitration agreement in the 1878 Treaty.
The 1885 Madrid Protocol also indicated the Spain renunciated all of their territorial claims over Sabah, thus Sabah is not part of the Spanish colony of the Philippines. The United Nations also recognised Sabah's participation in forming Malaysia as seen in the Malaysia Agreement 1963 (MA63) as seen under Article I.
(2) Secondly, the Spanish High Court decided in June 2020 that the appointment of the arbitrator was not properly served to Malaysia and inconsistent with the Spanish High Court of Justice of Madrid's case laws on the service of process on sovereign states.
It was against the peremptory international rules and Spanish law. However, the arbitrator still went ahead with the arbitration to France.
Hence, Dr. Gonzalo Stampa is not an arbitrator, hence his decisions and final award is null and void in the French Court. Stampa even violated the suspension of Exequatur Order. Stampa's final award on February 28, 2022 was rejected. This led to the violation of the Madrid and Court decisions.
Furthermore, the Spanish Public Prosecutor also filed a criminal complaint against Stampa for serious contempt of court and professional intrusiveness.
(3) Thirdly, Malaysia was not involved in the arbitration and that it was ex-parte, because Malaysia never recognised the claim to begin with and always upheld her sovereign immunity as a sovereign state.
A party cannot randomly sue a country in another different country's court. This principle is part of customary international law. Even if Malaysia does not have an Act for sovereign immunity, we have developed local case laws on this issue.
The recent case of Subramaniam a/l Letchimanan v The United States of America and another appeal [2021] 5 MLJ 612, explains that Malaysia applies 'restrictive sovereign immunity' that Malaysia cannot be taken action by another foreign court, unless it is commercial, private or trade in nature.
(4) Fourth, the claim was not commercial in nature nor an international private lease agreement, as an exception to sue one country in another country's court. It was an issue of sovereignty and the dignity of Malaysia. Moreover, the 1878 Treaty has no arbitration agreement, as even if there was, it no longer exists.
In an international award, to issue a default judgement was not possible as all evidence, to hear and test witnesses and satisfy itself is a requirement.
(5) Fifth, the identities of the Sulu heirs are very suspicious and yet to be confirmed. In fact, so far the Philippine government has not even recognised anyone so far for decades.
References;
Chan, J. (March, 2022) Malaysia says it does not recognise French court's US$14b award to Sulu Sultanate heirs. Retrieved from, https://www.malaymail.com/news/malaysia/2022/03/02/malaysia-says-it-does-not-recognise-french-courts-us14b-award-to-sulu-sulta/2045006
Chan, D. (March, 2022) Malaysia doesn't recognise French arbitration court ruling granting billions to Sulu Sultan's descendants. Retrieved from, https://www.nst.com.my/news/nation/2022/03/776319/malaysia-doesnt-recognise-french-arbitration-court-ruling-granting
FMT Reporters. (March, 2022) Arahan bayar RM62.5 bilion kepada waris Sultan Sulu boleh cetus kekacuan di Sabah, kata SAPP. Retrieved from, https://www.freemalaysiatoday.com/category/bahasa/tempatan/2022/03/02/arahan-bayar-rm62-5-bilion-kepada-waris-sultan-sulu-boleh-cetus-kekacuan-di-sabah-kata-sapp/
Reshna Reem Ganesan. (March, 2022) Does Malaysia have to pay billions to Sulu heirs? Retrieved from, https://www.freemalaysiatoday.com/category/nation/2022/03/02/does-malaysia-have-to-pay-billions-to-sulu-heirs/
Muguntan Vanar. (March, 2022) Malaysia has the option to set aside Paris court's US$14.92bil for Sulu heirs. Retrieved from, https://www.thestar.com.my/news/nation/2022/03/01/malaysia-has-the-option-to-set-aside-paris-court039s-us1492bil-for-sulu-heirs
Hetal Doshi & Sankalp Udgata. (2020) Anti arbitration injunction by Malaysian High Court-un(measured) invocation of sovereign immunuty. Arbitration International. doi: 10.1093/arbint/aiaa025
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