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Malaysia scores landmark victory against Sulu claim at Paris court

The Paris Court of Appeal has upheld Malaysia's challenge against the partial award rendered in May 2020.

3 minute read
The main entrance of the Palais de Justice in Paris which houses the Paris Court of Appeal. Photo: AFP
The main entrance of the Palais de Justice in Paris which houses the Paris Court of Appeal. Photo: AFP

The Paris Court of Appeal upheld Malaysia’s challenge against the partial award rendered on May 25, 2020 by Dr Gonzalo Stampa in the case filed by eight citizens of the Philippines, who are the purported heirs of the long-defunct sultan of Sulu.

Minister in the Prime Minister's Department (Law and Institutional Reform) Azalina Othman Said said the decision meant that the claimants could not rely on the "sham award" in France for any purpose.

"The Paris Court of Appeal found that the arbitrator (Stampa) wrongly upheld his jurisdiction.

"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," she said in a statement.
Azalina said Malaysia trusted that yesterday's decision of the Paris court would put an end to the efforts of the claimants and their funder, Therium, to enforce the awards and thereby extract windfall damages from Malaysia.

Azalina said as part of their strategy, the claimants had targeted Malaysia’s diplomatic assets in France, including part of its embassy, on the basis of this partial award.

However, she said that Malaysia had been fighting these measures on the grounds of diplomatic immunity.

"They must now be withdrawn following this decision that refuses to give any effect to the partial award in France," she said.

Importantly, she added, the decision implied that the Paris Court of Appeal would annul the purported final award, in which Stampa awarded the claimants close to US$15 billion.

The minister said Malaysia was 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.
"Stampa issued the final award despite his appointment having been annulled by the same Spanish court that 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, Stampa transferred the arbitration proceeding to France and issued his final award. Stampa’s sustained actions in defiance of Spanish court orders have resulted in a significant abuse of the international arbitration process," she said.

Azalina also expressed appreciation to Prime Minister Anwar Ibrahim for his support and trust in their ongoing efforts to uphold Malaysia’s position.

"We would also like to express our gratitude to Foreign Minister Zambry Abdul Kadir, Communications and Digital Minister Fahmi Fadzil, the attorney-general, the state government of Sabah, the Attorney-General’s Chambers, the Malaysian embassy in France, the relevant ministries and agencies, and all other parties involved," she said.

She said the government of Malaysia would continue to take all necessary action 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.

The group claiming to be the heirs of the Sulu sultanate was reported to have taken legal action in the Spanish court to seek compensation for land in Sabah, which was allegedly leased by their ancestors to a British trading company in 1878.

They took the matter to the Spanish arbitrator in 2019 and the purported arbitrator, Stampa, who was appointed by the group of individuals, decided in their favour.

Stampa issued a final award of US$14.9 billion (RM62.59 billion) against Malaysia and Malaysia had used all legal remedies to annul the award given by Stampa to claimants in courts in Spain, France, Luxembourg and the Netherlands.

On March 14, 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.

The suspension order obtained by Malaysia on the enforcement of the award is thus maintained.