Dutch appeals court set to rule on US$14.9 billion award to Sulus

The Hague Court of Appeal in the Netherlands will decide tomorrow on the Sulu claimants' application for the recognition and enforcement of a purported arbitral award of US$14.9 billion (RM62.59 billion) issued against Malaysia in February last year.

The court will also decide on whether the purported final award issued by a Spanish arbitrator, Dr Gonzalo Stampa, in 2022 to the eight individuals claiming to be heirs of the Sulu Sultanate may be enforced in the Netherlands. 

In their bid to enforce the US$14.9 billion final award, the Sulu claimants were reported to have attempted to seize Malaysia's oil firm Petronas' assets in Luxembourg, assets in the Netherlands and also targeted Malaysia's diplomatic assets in France (including part of its embassy). 

On April 19, the Sulu secretariat in a statement said The Hague Court of Appeal had heard submissions from the government of Malaysia and the Sulu claimants during the proceeding held on April 17.

During the proceeding, Malaysia submitted its defence that the Sulu claimants' application for the recognition and enforcement of the purported final award issued by Stampa against Malaysia is null and void and their request is inadmissible and therefore, must be denied.

The secretariat said Malaysia is committed to safeguarding its sovereignty and upholding the sanctity of the international commercial arbitration process and laying bare the claimants' frivolous attempts to enforce a sham award that is null and void.

"This is an attempt to hold a sovereign state to ransom and the continued existence of the award tarnishes the reputation of the globally respected arbitration system," it said.

On June 14, Prime Minister Anwar Ibrahim said that so far the Sulu claimants had taken legal action against Malaysia in four countries, namely Spain, France, Luxembourg and the Netherlands, and the Malaysian government has taken and is taking various counter-legal actions against them.

He said as a result of these active counter-measures, the Malaysian government on June 6 received a piece of good news when the Paris Court of Appeal upheld Malaysia’s challenge against the partial award rendered by Stampa.

The prime minister said the Paris Court of Appeal's ruling was a significant success or landmark decision for Malaysia, proving the determination and firmness of the Malaysian government in tackling this issue.

On June 6, Minister in the Prime Minister's Department (Law and Institutional Reform) Azalina Othman Said was quoted as saying that the Paris Court's decision means that the claimants cannot 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. 

The minister said importantly, this decision implies that the Paris Court of Appeal will annul the purported final award and the government of 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.

In 2019, the Sulu claimants took the matter to the Spanish arbitrator to seek compensation for land in Sabah, which was allegedly leased by their ancestors to a British trading company in 1878.

Stampa who was appointed by the Sulu claimants had on Feb 28, 2022, decided in their’s favour and the final award of US$14.9 billion (RM62.59 billion) resulting from the sham arbitration was issued illegally by Stampa to the eight claimants despite the prior annulment of his appointment as an arbitrator by the Spanish court.

The group then brought the case to the Paris Court. However, the Paris Court of Appeal, on March 14, 2023, upheld the suspension order obtained by Malaysia against the enforcement of the final award.