Malaysia hails 'decisive victory' over Sulu sultan's heirs after French court ruling
Malaysia secured a "decisive victory" in its challenge against a multibillion-dollar territorial claim over the state of Sabah in Malaysian Borneo, the country's law minister said, after a Paris court ruled the arbitrator involved in granting the award had wrongly upheld their jurisdiction.
A French arbitration court in February last year ordered the Malaysian government to pay US$15 billion to eight self-declared descendants of the defunct Sulu sultanate, who claimed losses after Malaysia stopped paying an annual stipend in the aftermath of a deadly incursion in Sabah by another group of claimants of the sultanate.
The Paris Court of Appeal, however, ruled on Tuesday that the arbitration court had no jurisdiction over the case.
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Its ruling "validates Malaysia's long-held position that this sham arbitration is nothing more than an attempt by a group of individuals to extort an exorbitant amount of money from Malaysia," said Robert G Volterra, counsel for the Malaysian government in the case, in a statement on Wednesday.
Azalina Othman Said, Malaysia's law minister, said the decision meant that the claimants "cannot rely on the sham award in France for any purpose".
"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," Azalina said.
Azalina said the decision "implies" that the Paris Court of Appeal will later annul the US$15 billion final award, which Malaysia hopes can happen as soon as possible to put an end to all other attempts by the claimants to enforce the award in other jurisdictions.
Malaysia has argued that the award was illegitimate as it was made by a rogue Spanish arbitrator who had in 2020 granted a partial award to the Sulu claimants. The same arbitrator would use that partial award as the basis for granting the US$15 billion award two years later.
In 2021, however, the Madrid arbitration court annulled the appointment of the arbitrator, Gonzalo Stampa, and determined the partial award to be null and void in Spain after it was found that Malaysia was not properly summoned by the claimants for the arbitration hearing.
Despite the removal of his appointment, Stampa proceeded to move the arbitration from Madrid to Paris where he eventually issued the award.
Stampa currently faces criminal proceedings in Spain after a complaint by Malaysia for disregarding the earlier ruling by the Spanish courts.
But his award remains enforceable outside France for now, as provided for under a United Nations treaty on international arbitration.
Malaysia is also tied up with applications by the Sulu claimants to seize national assets in Luxembourg and the Netherlands.
This article originally appeared on the South China Morning Post (SCMP).
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