Friday, March 31, 2023

Petronas had its subsidiaries worth US$2 billion seized by Sulu sultanate heirs

NewsPetronas had its subsidiaries worth US$2 billion seized by Sulu sultanate heirs

On Tuesday (12 July), Petroliam Nasional Bhd (Petronas) said 2 of its subsidiaries worth more than US$2 billion (≈RM8.87 billion) were seized by heirs of the last Sulu sultan.

However, Petronas later clarified that the subsidiaries, Petronas Azerbaijan (Shah Deniz) S.à r.l. and Petronas South Caucasus S.à r.l., had previously divested their entire assets in Azerbaijan.

In a statement, the national oil and gas company also said that the proceeds from the exercise had been duly repatriated.

Source: Kosmo

“We confirm that our two subsidiaries mentioned in the report have been served with ‘Saisie-arret’ on 11 July 2022,”

“Petronas views the actions taken against it as baseless and is working vigorously to defend its legal position on this matter,” the statement reads.

‘Saisie-arret’ means an act of seizure to obtain the total judgment/decision (award) of the arbitration.

Earlier on the same day, Financial Times reported the seizure of two Petronas subsidiaries in Luxembourg by lawyers representing the heirs of the Sulu sultanate as part of an ongoing dispute between the heirs of the Sulu sultanate and the government.

In March this year, the international court in Paris, France 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.

With this, 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 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.

Malaysia was not represented in the Paris arbitration, arguing that the dispute between Malaysia and the claimants was not a commercial contract, thus not subject to arbitration.

Responding to the issue, Prime Minister Datuk Seri Ismail Sabri Yaakob said that Malaysia had applied for the final award of RM62.59 billion given to a group claiming to be the heirs of the Sulu sultan to be cancelled.

The application was filed on 3 March in Paris’ Court of Appeals to nullify the decision, which was ruled by Spanish arbitrator Gonzalo Stampa.

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