When we dive into the colonial history of Southeast Asia, things can get rather messy in terms of the way important events and the stories of significant figures are retold.
Looking at Malaysia, for example, brings about a whole library's worth of history that simply can't be told in one sitting. However, one such remnant of Malaysia's past has come back to haunt the Southeast Asian nation.
More specifically, arbitration awards allegedly owed to the heirs of the last Sultan of Sulu, who in the 19th century reigned over parts of what is today the Philippines, the state of Sabah (Malaysia), as well as North and East Kalimantan (Indonesia).
US$14.9 billion in Malaysian government assets owed, apparently.
IMAGE: Tingey Injury Law Firm / Unsplash
Back in February 2022, a French arbitration court ruling ordered the Malaysian government to pay US$14.92 billion to the heirs of the last Sultan of Sulu, as part of a settlement for a colonial-era land deal.
More recently on July 12, however, the Paris Court of Appeal stayed the ruling – explaining that enforcing the award could violate Malaysia's sovereignty as a nation.
But according to lawyers representing the Sulu heirs, the February ruling remains valid in 169 other countries, even if it isn't enforceable in France itself (where the ruling was made). This spells uncertainty for any Malaysian government asset abroad.
"The 'stay' that seems to comfort the Malaysian government temporarily delays local enforcement in one country, France itself," said the heirs' lead co-counsel, Paul Cohen, of London-based law firm 4-5 Gray's Inn Square. "It does not apply to the other 169."
Almost any type of asset falls under the arbitration award enforcement, with some exceptions like diplomatic premises (high commissions and consulate generals), which officially count as sovereign Malaysian territory according to the Vienna Convention on Diplomatic Relations.
The effects of arbitration enforcement have already been felt.
IMAGE: Reuters / Al Jazeera
Two Luxembourg-registered holding companies belonging to Malaysian state oil firm Petronas were seized last week as part of the arbitration enforcement. The combined value of the two units – Petronas Azerbaijan (Shah Deniz) and Petronas South Caucasus – is reportedly US$2 billion.
Naturally, the oil firm called the seizures a "baseless" action and vowed to defend its legal position in court. For now, the two assets are under the control of bailiffs in Luxembourg until Petronas makes an official appeal against the seizure.
"We note Petronas’ description of certain transactions, and we note their statement that those transactions are complete," said Elisabeth Mason, another one of the heirs' lawyers.
"We will discover the full picture of all assets in due course."
Why does the Sultanate of Sulu – or rather, its descendants – want these assets?
A painting of Sultan Jamal Al Alam in discussion with French delegation at his palace. IMAGE: Philippine Archive / Wikimedia Commons
Back in 1878, Sultan Jamal Al Alam (the then Sultan of Sulu) entered a deal to lease his territory out to Baron de Overbeck (the maharaja of Sabah at the time) and Alfred Dent of the British North Borneo Company.
As part of the deal, both Overbeck and Dent would have individual control over large parts of what is now the state of Sabah. Also part of the agreement was the annual payment of 5,000 Mexican dollars to the heirs of the sultan – to be made by Overbeck and Dent, as well as their respective heirs.
Jamalul Kiram II with U.S. President William Howard Taft. IMAGE: The Odyssey of the Philippine Commission / Wikimedia Commons
The last officially-recognized Sultan of Sulu, Jamalul Kiram II, died in 1936 without any heirs. This meant that there was no one to receive the annual payments that still legally needed to be doled out. Just three years later in 1939, North Borneo High Court chief justice Charles F. Macaskie named nine heirs appointed by the court itself, and so, payments resumed.
When Sabah gained independence and Malaysia formed in 1963, Malaysia officially took over the payment agreement, paying the heirs the equivalent of RM5,300 per year.
The 2013 Lahad Datu Standoff saw 68 lives lost. IMAGE: Reuters / Reddit
The country continued these payments every year until the Lahad Datu conflict in 2013 (known as the 2013 Lahad Datu Standoff), which saw a group of armed men, from Pulau Simunul of Tawi-Tawi in the southern Philippines, invade the eastern shores of Sabah. These men were followers of Jamalul Kiram III, the self-proclaimed Sultan of Sulu. He had also been living in the Philippines at the time, officially recognized as a Philippine national.
Naturally, this incursion into Sabah quickly grew into a full-fledged military conflict between the Malaysian Armed Forces and the Sulu gunmen. The death toll reached 68 in total – 56 Sulu gunmen, nine among Malaysian authorities, and six civilians.
The bloodshed of this conflict led many to call for the cessation of payments to the Sulu Sultanate as retribution for the incursion.
And here we are today, with the Sulu heirs demanding for payment to resume.
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