Malaysia defiant, to fight Sulu sultanate heirs’ claims

MALAYSIA WILL protect the country’s assets over claims by the Sulu sultanate heirs, said Prime Minister Ismail Sabri Yaakob.

“Since they brought the case to court, we will also protect our assets through legal channels. I give the assurance that we will not compromise or even budge an inch in defending the country’s rights and sovereignty,” he told reporters after opening the 2022 National Security Conference here.

Ismail was responding to the legal action by the Sulu sultanate’s heirs who were reported to have threatened Malaysia’s interests and assets overseas, especially assets belonging to government-linked companies.

 Sultan Jamalul Kiram III reads the Mindanao Examiner regional newspaper in this file photo by Mark Navales, the paper's bureau chief in southern Philippines.

On July 12, the assets of Petronas’ two subsidiaries in Azerbaijan were reported to have been seized by court bailiffs acting on behalf of the sultan’s heirs who are claiming US$14.92 billion (RM62.59 billion) from Malaysia.

The move was said to be part of legal efforts launched in 2017 by the heirs to receive compensation over land in Sabah which they claimed their ancestors had leased to a British trading company in 1878.

Ismail said he was made to understand that Petronas and law minister Wan Junaidi Tuanku Jaafar would give an explanation to Parliament soon on the seizure of the Petronas assets in Azerbaijan.

He said the Cabinet had, on July 14, agreed to set up a special task force to study, monitor and formulate an appropriate action plan based on the provisions of the law to address the issue.

When asked about the need to mobilise security forces to defend the country’s assets overseas, he said: “It’s not easy to bring security forces to other countries, unless under the United Nations flag.”

The Paris Court of Appeal allowed the Malaysian government’s application to stay the enforcement of the final award issued by the arbitration court on the grounds that it would affect the immunity of Malaysia’s sovereignty.

Wan Junaidi said that as a result of the suspension order given by the Paris Court of Appeal, the final award cannot be enforced in any country until a decision is made by the Paris court regarding the Malaysian government’s application for cancellation of the final award.

Dispute

The dispute arises after “heirs” and “successors-in-interest” to Sultan Jamalul Kiram II initiated a claim against the government of Malaysia through an international arbitration proceeding in Madrid, Spain, Malaysia's Ministry of Foreign Affairs and Attorney General’s Chambers (AGC) had said in a joint statement in March.

The ministry and AGC said the claim is based on an agreement Sultan Mohamet Jamal Al Alam, the Sultan of Sulu at the time, and Baron de Overbeck and Alfred Dent entered into in 1878 under which the Sultan of Sulu granted and ceded in perpetuity the sovereign rights over certain territories located in North Borneo, now forming part of Sabah, Malaysia.

“As a token, RM5,300 per annum was to be paid to the then Sultan of Sulu, his heirs or successors. Following the Lahad Datu armed invasion, payment was ceased in 2013,” the statement read.

The statement was issued after the French arbitration ruling, a ruling which Malaysia pointed out it had not participated in.

“The government of Malaysia does not recognise the claim and did not participate in the purported arbitration proceedings because Malaysia has always upheld and has never waived its sovereign immunity as a sovereign state,” Putrajaya said in its March statement.

“In addition, the subject matter of the claim is not commercial in nature and thus cannot be subject to arbitration and the 1878 Agreement contains no arbitration agreement. We further stress that the claimants’ identities are doubtful and have yet to be verified,” it added.

The Financial Times also reported that if Malaysia continues to ignore the ruling, the money owed to the “heirs” is set to increase, and the claimants’ lawyers indicated that they would pursue more state assets if a resolution was not reached.

The arbitrator in France previously highlighted that for every year the Sulu heirs are getting unpaid, Malaysia’s outstanding liability to the heirs will rise by 10%, the report noted.

Bernama in May, citing Foreign Minister Datuk Seri Saifuddin Abdullah, reported that Malaysia will be sending diplomatic notes to 168 countries that signed the New York Convention as an early notification on possible unilateral legal claims by descendants of the Sulu Sultan.

The proactive move was taken so that 168 countries were aware of the unilateral claim, apart from hoping that the countries involved would inform Malaysia if there were such applications filed in their countries, Saifuddin reportedly said.

Unpaid cession money

In March, descendants of the Sultan of Sulu have filed a case against Malaysia in a French court to claim over $32 billion in unpaid cession money as well as how much they believe they are owed for the oil and gas found in Sabah.

The Sultanate of Sulu, founded in 1457, continues to lay claim to Sabah which it obtained from Brunei as a gift for helping put down a rebellion on Borneo Island. The British leased Sabah and transferred control over the territory to Malaysia after the end of World War II.

The Sulu Sultanate said it had merely leased North Borneo in 1878 to the British North Borneo Company for an annual payment of 5,000 Malayan dollars then, which was increased to 5,300 Malayan dollars in 1903. The Sultanate of Sulu is believed to exist as a sovereign nation for at least 442 years. It stretches from a part of the island of Mindanao in the east, to Sabah, in the west and south, and to Palawan, in the north. But North Borneo was annexed by Malaysia in 1963 following a referendum organised by the Cobbold Commission in 1962, the people of Sabah voted overwhelmingly to join Malaysia.

According to the Malaysian newspaper The Star, a French arbitration court has “instructed” the Malaysian government to pay $14.92bil (RM62.6bil) to the descendants of the last Sulu sultan. It reported that Arbitrator Gonzalo Stampa, who is from Spain, issued the award in a Paris court. The decision was based on the alleged violation of payments of RM5,300 cession money under the 1878 agreement signed by Sultan Jamal Al Alam, Baron de Overbeck and the British North Borneo Company’s Alfred Dent.

Malaysia stopped paying the Sultan Sulu’s heirs their annual RM5,300 cession money after over 200 armed followers of the Sultan of Sulu, Jamalul Kiram III led by his younger brother Agbimuddin Kiram landed in Lahad Datu town in Sabah in 2013 to press the ancestral claim on the oil-rich territory. Malaysia responded by sending troops and launching airstrikes before the stand-off ended. The conflict, which lasted more than a month, resulted in the deaths of 68 men from the Sulu sultanate, nine Malaysian armed services personnel and six civilians.

The Star also quoted a report by the Spanish news website La Información which said that Stampa had issued the award, ruling that the 1878 treaty was a commercial “international private lease agreement.” By not paying the cession money since 2013, Stampa said Malaysia had breached the agreement and would have three months to pay up failing which interest would be charged if the decision was not accepted.

On March 17, 2020, Kota Kinabalu High Court judge Datuk Martin Indang ruled that Malaysia was the proper venue to resolve disputes arising from the 1878 Deed of Cession and not the Spanish courts, which do not have authority nor jurisdiction over Malaysia. Justice Idang said this when deciding in favour of the Malaysian government in its suit against eight of the supposed descendants of the sultan of Sulu at the Kota Kinabalu High Court on March 17.

He said there was no binding agreement between the Government and the sultan’s heirs that compelled either party to also submit to arbitration in the event of a dispute.

The heirs’ claims were originally heard in Madrid until the Madrid High Court annulled Stampa’s appointment on grounds that Malaysia was not properly informed about the case and was thus “defenceless”. The case was later moved to the French capital.

Sultan Esmail Kiram III died in 2015 from renal failure at a hospital in Zamboanga City in southern Philippines. His body was brought to his hometown in Sulu’s Maimbung town and buried beside the tomb of his elder brother, Jamalul, whom he succeeded in 2013. The 75-year old sultan was one of the most influential members of the Royal Sultanate. And Agbimuddin also died early of cardiac arrest the same year in Tawi-Tawi province after escaping from Lahad Datu at the height of the Malaysian assault on his group.

Datu Phugdal Kiram, another brother, has reportedly assumed the throne, but the sultanate does not hold any power anymore in the modern-day Philippines, and is more of a title although Malaysia previously paid an annual rental for the island to whoever sits as the head of the Royal Sultanate. But there are dozens of sultans claiming to be the legitimate heir to the throne.

 

North Borneo Bureau

Two years ago, the Philippines said it would revive the “North Borneo Bureau” to exert its claim to the mineral-rich Sabah even if Malaysia insisted it was theirs. Then Foreign Affairs Secretary Teodoro Locsin Jr. told lawmakers that he has decided to revive the North Borneo Bureau to uphold the country's claim to Sabah.

Sulu Governor Sakur Tan previously said the cession money that Malaysia paid annually to the heirs of the Sultan of Sulu was insulting. “The amount is insulting anyway, you can never change history,” he told the regional newspaper Mindanao Examiner.

A report by ABS-CBN also quoted Locsin as telling members of the House Appropriations Committee that: “While we fiercely guard our waters, we are not forgetting our terrestrial domain. In pursuit of securing what is ours, I have decided to reactivate the North Borneo Bureau.”

“After realizing that the rest of us have almost forgotten our Sabah claim, casually designating it as another country’s territory, well we have not forgotten. This is one of several international disagreements we can afford to conduct in our best interest without any risk of loss of any kind for our country,” he said, adding, “Our honor is involved here.”

Even Nur Misuari, chieftain of the Moro National Liberation Front, said that what Malaysia pays to the Sultanate of Sulu (and North Borneo), was but a pittance.

Last year, President Rodrigo Duterte’s Spokesman Salvador Panelo said the government has not abandoned its claim on Sabah. “The position of the President, meron tayong claims. Eh totoo namang may claim tayo di ba? That has been a bone of contention ever since,” he said.

 

Sultans

Sultan Ibrahim Bahjin-Shakirullah II said North Borneo is an inextricable part and parcel of the Sultanate of Sulu.

He said the Sultanate of Sulu asserts its position on the following: 1.) The Sultanate of Sulu and North Borneo was never lawfully ceded to the Republic of the Philippines, and therefore remains a sovereign and independent state; 2.) The stipulation in the Deed of 1878 that the lessees of North Borneo shall administer the territory for “as long as they choose or desire to use them” places it in the category of a “perpetual lease”, effective for 100 years under international law. The contract of lease has therefore expired and possession over North Borneo should now be exercised by the Sultanate of Sulu, its rightful owner. And 3.) The heirs of Jamalul Kiram III do not have private ownership of Sabah. The territory continues to be owned by the Sultanate of Sulu, and not any private person.

In view of the history of the Sultanate and the circumstances surrounding the lease of Sabah, he said: “We desire the recognition of the independent statehood and sovereignty of the Islamic Sultanate of Sulu and North Borneo.”

But Sultan Muedzul-Lail Tan Kiram, who claims to be the 35th Sultan of Sulu and North Borneo, said his grandfather, Sultan Mohammad Esmail Enang Kiram, who was recognized by the Philippine government in 1957, “transferred the rights of North Borneo under the government of President Diosdado Macapagal in 1962.”

Kiram said his father, Sultan Mohammad Mahakuttah Abdulla Kiram, and he, being the Crown Prince of Sulu, confirmed the transfer of the rights of North Borneo to the Philippine government and this was made official through Memorandum Order No. 427 issued by President Ferdinand Marcos in 1974. “We aspire for an amicable solution to the predicament that affects us all in this region,” Kiram said, adding, “The Royal House of Sulu firmly believes that diplomacy will allow us to move forward as governments and other parties involved play a crucial role from alleviating our people from poverty.”

The two are only among the 5 recognized sultans in Sulu. The others are Sultans Mohammad Venizar Julkarnain Jainal Abirin, Muizuddin Jainal Abirin Bahjin and Phugdalun Kiram II. (Free Malaysia Today, The Edge Markets and Mindanao Examiner)