Dutch court rules Sulu heirs cannot seize Malaysian assets

A Dutch Court of Appeal dismissed on Tuesday a bid by eight descendants of a former sultanate to enforce a US$15-billion arbitration award against the government, which hailed the decision as a "landmark victory".

Prime Minister Anwar Ibrahim said the government was confident it was "closer than ever to completely nullifying" the award after the decision.

"Malaysia trusts that today’s decision... will put an end to the frivolous attempts of the claimants to enforce the purported final award in other jurisdictions," Anwar said in a statement.

Last year, a Paris arbitration court awarded US$14.9 billion to the Filipino heirs of the last sultan of Sulu, in a long-running dispute with Malaysia over a colonial-era land deal.

They have since sought to seize government assets in France, Luxembourg and the Netherlands, in a bid to enforce the award.

Malaysia, which did not participate in the arbitration, says the process is illegal. It secured a stay on the award in France but the ruling remains enforceable overseas under a UN treaty on arbitration.

In September, the heirs sought permission from a Dutch court to enforce the award in the Netherlands, Reuters reported.

However, Dutch judges sided with Malaysia, saying the original pact lacked a clause binding parties to arbitration and the French stay meant the claim was not enforceable in the Netherlands, the court said on its website on Tuesday.

Lawyer Paul Cohen, acting for the Sulu heirs, said they were disappointed with the court decision. He would not say if they would lodge an appeal against the ruling.

The dispute stems from an 1878 deal between European colonists and the Sultan of Sulu for use of his territory, which spanned parts of the southern Philippines and present-day Malaysia on the island of Borneo.

Independent Malaysia paid a token sum annually to the sultan's heirs to honour the agreement but stopped in 2013, after supporters of the former sultanate launched a bloody incursion to reclaim land from Malaysia.

The heirs say they were not involved in the incursion and sought arbitration over the suspension of payments.

This month, a Paris court upheld the government's challenge against enforcing a partial award to the heirs. Malaysia said the decision implied the final arbitration award would be annulled.