The Malaysian government has been instructed to pay at least US$14.92 billion (≈RM62.59 billion) to the descendants of the Sulu Sultan, almost 20 years after making the last payment to its heirs.
The international court ruled that the government has violated the treaty after deciding to stop the Sulu sultan heirs’ annual RM5,300 cession money payment in 2013 following the Lahad Datu incursion.
According to a report by La Información, the award was issued in an arbitration court in Paris, France by Spanish arbitrator Gonzalo Stampa.
Stampa said the agreement, which was signed on Spanish soil, constituted a commercial “international private lease agreement”.
By not paying the cession money since 2013, he said Malaysia had breached the agreement and would have 3 months to pay up failing which interest would be charged if the decision was not accepted.
The treaty was signed on 22 January 1878 by Sultan Jamal Al Alam of Sulu with Baron de Overbeck and Alfred Dent of the British North Borneo Company that stipulates North Borneo (Sabah) was either ceded or leased (depending on the translation used) to the company in return for a yearly payment of 5,000 Malayan Dollar.
The Sulu sultan’s descendants were represented by a Spanish law firm, the B Cremades & Asociados together with London based Paul Cohen and Elisabeth Mason.
The initial claim was US$32.2 billion (≈RM135.08 billion) from Malaysia that comprised of the unpaid cession money and how much they believed they should have been paid for the oil and gas found in the region.
On 17 March 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.
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 Paris.
Malaysia was not represented in the Paris arbitration hearing however it was reported that Malaysia is challenging Stampa’s validity to hear the case in criminal court.