THE Sulu partisans’ claim to US$14.9bil (RM66.3bil) from Malaysia had on July 11 bailiffs in Luxembourg seize two PETRONAS subsidiaries registered there in supposed part-restitution.
The sum is allegedly for unpaid dues and a share of Sabah’s oil revenues. These claims are totally without any merit or justification.
The claimants’ London-based American lawyers reportedly said the case involves only the arrears of the RM5,300 annual cession payments since 2013 plus interest, not for any claim to Sabah territory. However, the larger part of the quantum deriving from Sabah’s oil revenues relates directly to claims on territory, not to the annual cession payments.
Other inconsistencies bedevil this latest controversy based on a flawed historical perspective.
The lawyers cite an agreement between Sulu and Malaysia, noting in particular its arbitration clause. However, there was never any agreement between the Sulu sultanate which expired in 1936 and Malaysia which was established in 1963.
The only conceivable agreement is the January 1878 treaty between Sultan Jamal-ul Azam of Sulu and the British North Borneo Provisional Association, later the British North Borneo Company (BNBC). That was for the permanent cession of North Borneo with the sovereign powers of government for the company, for an annual payment to the Sultan of 5,000 Mexican pesos, later in Straits dollars.
The agreement contained no arbitration clause; a reference to Her Britannic Majesty’s Consul-General for Borneo relates to a British government office that has since closed. When the Sulu partisans launched their current action in 2017 in London, calling for intervention by the British government, they were told to seek redress in Malaysia.
British officials had earlier encountered Sulu’s untenable demands soon after the cession was signed and sealed. Sulu persisted in demanding more money and even wanted North Borneo back.
This was a wretched nuisance to the BNBC, which had already obtained North Borneo from Brunei, to which the territory originally belonged, for a lump-sum payment in December 1877. Sulu had staked a disputed claim to the territory for more than a century before, so the Brunei Sultanate resolved it by ceding it to the BNBC.
The company sought British government protection, receiving royal charter status in 1881. North Borneo then became a British protectorate in 1888.
BNBC officials also sought to end Sulu harassment with a supplementary Confirmation of Cession and Certain Islands treaty in 1903. This confirmed the 1878 agreement was for a permanent cession and not a lease, with the inclusion of some outlying islands, and in return Sulu would receive an additional 300 Straits dollars in the annual cession payment.
Yet even by 1878 the Sulu Sultanate had become inoperative, having fully surrendered its power, authority, territory and claims on territory to Spain. It also signed several treaties with Spain to refrain from making any agreement about territory with any external entity.
Both Spain and the US effectively nullified the sultanate, which continued in name until 1936 when the last Sulu sultan, Jamalul Kiram II, died without an heir. Regular US payments to the Sultan under the 1915 Carpenter Agreement were stopped, yet Sulu did not demand continued payment.
Britain colonised North Borneo in 1946, granted it self-rule in August 1963, and with adjacent parcels of land North Borneo formed Sabah as a state in the Malaysian Federation in September. There was no clear obligation for Malaysia to continue cession payments, so claimants alleging ties to the deceased Sultan requested Malaysia to continue payment.
Malaysia agreed verbally, on condition that the claimants did not harass Sabah or Malaysia over territory. But when “Raja Muda” Agbimuddin led an armed attack on Sabah in 2013 masterminded by his brother “Sultan” Jamalul Kiram III, Malaysia stopped payment.
Several claimants have vied for the Sulu “throne”, but only Jamalul Kiram III was recognised as Sultan by President Ferdinand E. Marcos. All seven subsequent administrations including the present one of Bongbong Marcos did not endorse any other claimant as “Sultan”.
After their London rebuff, the claimants sought a “final award” at the Madrid High Court earlier this year that was annulled following Malaysia’s application, then in Paris where Malaysia’s action produced a suspension order from the Court of Appeal on July 12. Their latest move in Luxembourg is now fraught with challenges.
Luxembourg is a signatory to the European Convention on State Immunity (1972) as well as its Additional Protocol, which give Malaysia options in setting aside such impertinent actions. There is also the UN Convention on Jurisdictional Immunities of States and Their Property (2004) which gives Malaysia legal space.
Malaysia’s arguments include not having waived its sovereign immunity, the 1878 agreement containing no arbitration clause, and the agreement being neither private nor commercial in nature. These are valid arguments for setting aside Sulu’s actions under Articles V and VI of the New York Convention, which the actions come under.
Some recent exceptions to state immunity concern grave human rights violations, not monetary compensation from territorial claims.
The Anglo-American legal tradition also provides Malaysia space by way of the statute of limitations on claims. Sulu partisans may hope to “refresh” their historical claims by tying them to a 2013 event, but their basic claim is still old and historical claims are inadmissible in international law.
For Manila, any progress in Sulu’s claims is a step back in the South China Sea against China’s extensive claims, which are also wholly historical in nature.
Bunn Nagara convenes the Sabah Malaysia Study Group, an independent forum of specialists on North Borneo history and the legal provisions of Sabah in Malaysia. The views expressed here are solely the writer’s own.
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