Luxembourg court stops Sulu sultan heirs' seizure of Malaysia assets

Anjo Bagaoisan, ABS-CBN News

Posted at Jan 28 2023 11:56 PM

A man stands near giants Malaysian national flags inside a shopping mall ahead of Malaysia Day celebrations at Bangi, outside Kuala Lumpur, on September 15, 2020. Fazry Ismail, EPA-EFE/file

Heirs’ lawyer: Decision ‘doesn’t constitute a win’

MANILA — A group of descendants of the Sultan of Sulu on Saturday said they will continue enforcing a $15-billion French arbitral award against Malaysia over a centuries-old deal on the territory of Sabah.

This after a Luxembourg court last Tuesday ordered the release or cancellation of the seizure of 2 Luxembourg-based subsidiaries of the Malaysian state oil firm Petronas in July 2022.

Malaysia had also petitioned the court to declare the seizure invalid.

But district judge Frederic Mersch said another appropriate court should decide on invalidity and instead ruled only to release the seizure and transfer of assets, based on a machine-translated copy of the French-language ruling obtained by ABS-CBN News.

The court said the 8 claimants were not justified in listing the address of their law firm in Makati City, Philippines as theirs instead of their actual residences, despite the heirs citing personal security due to the financial stakes of the dispute.

Malaysia had argued the lack of actual addresses would affect the service of documents and other actions in the case.

The seizure is based on a French arbitral ruling in March 2022 which ordered Malaysia to pay the descendants $14.9 billion (over P800 billion) as compensation over land in Sabah which the heirs said the Sultan of Sulu leased to the colonial British—a decision Malaysia has refused to recognize.

Malaysian law minister Azalina Othman Said on Thursday called the Luxembourg court’s ruling a “significant victory”.

“This decision vindicates the Government's policy to vigorously defend Malaysia in every forum to ensure that Malaysia's interests, sovereign immunity and sovereignty are protected and preserved at all times. The Government will spare no effort to this end,” Said said in a statement

However, Paul Cohen, the London-based lawyer of the Sulu sultan’s heirs, downplayed the decision’s impact on enforcing the separate French arbitral ruling.

“This apparent triumph deeply misrepresented the state of play. A good save by the goalie in a football match in the last ten minutes of a match when you are five goals down is worthy of a cheer: It doesn’t constitute a win,” Cohen said in a statement sent to ABS-CBN News.

The lawyer cited the district judge’s basis for the decision on the failure of his clients’ to disclose their home addresses, as well as his refusal to rule on annulling the seizure.

“The judge made clear – what the Malaysian press release did not – that he is not making a judgment either way on the merits of the case in Luxembourg, which continues. And, for the avoidance of doubt, he was not ruling on the Claim, the Arbitration, the $14.9 billion award or the decision to take the enforcement action to Luxembourg. But he is concerned that the paperwork should have had the addresses,” Cohen said.

“We will correct this. The enforcement action continues.”

Malaysia had been issuing annual payments to the heirs for years until 2013, when followers of the late Sultan Jamalul Kiram III staged a bloody incursion into Sabah to enforce their territorial claim there.

Kiram is not among the claimants named in the arbitral award.

In July 2022, the Paris Court of Appeal granted Malaysia a stay in enforcing the ruling in France, but international law allows it to be enforced in other countries.

Later that year, the heirs also moved to seize Malaysian assets in The Netherlands.

The commercial arbitration case filed in 2017 only involves the heirs and not the Philippines, which has a claim on Sabah.