Malaysia wins Paris court case against $15bn colonial-era land deal

The Malaysian government has achieved a significant victory in a Paris court, which upheld their challenge against enforcing a partial award of US$15 billion to the heirs of a former sultan in an arbitration case concerning a colonial-era land deal. This decision implies that the final award will be annulled, and the descendants’ attempts to seize Malaysian assets will come to an end.

The Filipino heirs of the last Sultan of Sulu were awarded US$14.9 billion in a French arbitration court last year in a long-standing dispute over the deal. However, the Paris Court of Appeal found that the case arbitrator had wrongly upheld his jurisdiction, according to Malaysia.

Malaysia, which did not participate in the arbitration, insists that the process is illegal and has vowed to use all legal measures to prevent seizure. While a stay on the award was obtained in France, the ruling remains enforceable overseas under a United Nations treaty on arbitration.

The dispute originated from an agreement signed in 1878 between European colonists and the Sultan of Sulu concerning the use of his territory, which included islands in the southern Philippines and parts of present-day Malaysia on Borneo island. Independent Malaysia paid a nominal sum annually to the sultan’s heirs to honour the agreement but ceased payments in 2013 after supporters of the former sultanate launched a violent incursion to reclaim land from Malaysia. The heirs claim they were not involved in the incursion and sought arbitration over the suspension of payments.

In recent months, Malaysia has increased efforts to protect itself from the arbitration award, including filing police complaints against one of the claimants’ lawyers. The Filipino claimants and their lawyers have requested protection from their respective foreign ministries due to concerns that there could be further actions against them.