Malaysia obtains stay order against $15B award to heirs of late Sultan of Sulu

KUALA LUMPUR, Malaysia – Malaysia said on Wednesday, July 13, it had obtained a stay order against the enforcement of a French arbitration court ruling ordering the government to pay $14.9 billion to the descendants of a late sultan over a colonial-era land deal.

A British law firm representing the heirs did not immediately respond to a request for comment.

The Paris Court of Appeal on Tuesday allowed an application by the Malaysian government for the stay after finding that enforcement of the award could infringe the country’s sovereignty, Malaysia’s law minister Wan Junaidi Tuanku Jaafar said in a statement.

Malaysia is also preparing to have the ruling set aside, he said.

The stay order comes a day after lawyers representing the heirs of the late sultan moved to seize two Luxembourg-based units of Malaysian state oil firm Petronas. Petronas has described the seizure as “baseless” and said it would vigorously defend its legal position.

The heirs claim to be successors-in-interest to the last Sultan of Sulu, who entered a deal in 1878 with a British trading company over the use of his territory, now known as the Malaysian state of Sabah.

Malaysia took over the arrangement after independence from Britain, paying a token sum to the heirs annually. But the payments were stopped in 2013, with Malaysia arguing that no one else had a right over Sabah, which was part of its territory.

A French court issued the $14.9 billion award in favor of the heirs in February, with Malaysia refusing to participate in the arbitration.

Wan Junaidi said Malaysia did not recognize the heirs’ claim and would take all steps to uphold the country’s sovereignty. – Rappler.com