KUALA LUMPUR, Jan 30 — The failure by a group of individuals — who insist that they are allegedly the "heirs" of the Sulu sultan — to disclose their actual addresses was the reason why a Luxembourg court had set aside an order to seize Petronas assets there, the law minister said today.
Datuk Seri Azalina Othman Said, the minister in charge of law and institutional reform, explained the District Court of Luxembourg's January 24 decision to lift or set aside a July 11, 2022 order — which was obtained by the purported Sulu heirs — for the seizure of the assets.
"The District Court of Luxembourg accepted Malaysia’s challenge based on the fact that the claimants had, according to the court, voluntarily omitted to reveal their real addresses," she said in a statement today, referring to the alleged Sulu heirs as "claimants".
Azalina said the Luxembourg court considered the self-styled Sulu heirs' omission of their real addresses to be a "significant" omission and found that their conduct impeded the serving or delivery of documents to them and also the enforcement of the potential judgment to be given against them.
Azalina said the court found such conduct by the alleged Sulu heirs to amount to a "manifestly illicit hardship" that is detrimental to Malaysia.
"This conduct is typical of the deceitful and fraudulent manner in which the claimants have consistently conducted themselves in their claim against Malaysia. It comes as no surprise that the claimants’ case failed at the first instance.
"The government of Malaysia is relentless in its effort to protect and preserve Malaysia’s interests, sovereign immunity and sovereignty at all times and will continue to vigorously take all the necessary actions to put an end to the Claimants’ fictitious claim," she said.
The whole chain of events can be traced back to an arbitration process that the alleged Sulu heirs had started several years ago to claim billions of US dollars from Malaysia as compensation, which is far more money than the RM5,300 annual sum previously agreed to by Sulu sultans in 1878 and 1903 in relation to Sabah.
The alleged Sulu heirs claim that the Sulu sultanate had only given a "lease” for Sabah in exchange for a purported rent of RM5,300 every year, but Malaysia insists that the Sulu sultanate had 144 years ago given away Sabah in return for the yearly payment.
The Sulu claimants were accused of forum shopping or choosing a court that would be most favourable to them, initially seeking arbitration in the UK only to be turned down, and starting the arbitration in 2019 with Spain-appointed arbitrator Gonzalo Stampa.
After the High Court of Sabah and Sarawak in 2020 declared Stampa as having no jurisdiction over Malaysia and ordered a stop to the continued arbitrations in Spain, Stampa and the Sulu claimants ignored a Spanish court's decision to cancel his appointment and shifted the entire arbitration to France.
Ignoring the Spanish and French courts' decisions which meant the arbitration was illegitimate, Stampa on February 28, 2022, gave his arbitration decision — also known as the "final award" — to order Malaysia to pay US$14.92 billion to the eight Sulu claimants.
Following the February 2022 final award, Luxembourg on May 18, 2022, recognised Stampa's "final award" or arbitration decision by issuing an ex parte Exequatur Order. Malaysia is currently challenging this ex parte order before the Luxembourg Court of Appeal.
On July 11, 2022, Luxembourg bailiffs seized two Petronas subsidiaries and their assets to enforce the US$14.92 billion arbitration award, as applied for by the Sulu claimants’ lawyers.
After the seizure order issued in July 2022, Azalina said Malaysia had immediately applied to the District Court of Luxembourg to obtain an interim relief to release or set aside the seizure order known as "saisie arrêt". After a December 5 hearing, the District Court of Luxembourg on January 24 set aside the seizure order.
As of July 2022, the eight purported Sulu claimants comprise three retirees (aged 68, 68, 74), three unemployed persons (aged 51, 65, 70), one school administrator (aged 54) and one businessman (aged 70).
According to Stampa's written award, the Sulu claimants had spent over US$3.5 million on the fees and costs for their lawyers in UK, Spain and Philippines and fees for experts; and had also put up US$3.35 million as deposits for both themselves and Malaysia for arbitration fees and costs.
This would come up to a total US$6,852,394.24 or over US$6.8 million, but a US$998,000 sum from the US$3.35 million deposit was later refunded to the Sulu claimants.
Litigation funding firm Therium is reportedly funding the Sulu claimants, with the company's website saying litigation funding is when part or all of the legal costs are paid and with the claimant not owing any money to the company if the case fails.
* A previous version of this story contained an error which has since been corrected.