French bailiffs attempt to seize three Paris properties owned by Malaysia in Sulu sultanate legal dispute

KUALA LUMPUR: French bailiffs have attempted to enforce a seizure order on three Paris properties owned by the Malaysian Government there following a bid by descendants of a former sultanate to enforce a US$15bil (RM66bil) award they had won against Malaysia.

Reuters reported that the bailiffs tried to assess the properties on Monday (March 6) following a court-issued seizure order in December 2022 but Malaysian officials at the Paris embassy turned them away.

The Filipino heirs of the last sultan of Sulu are seeking to enforce a US$14.9bil award granted to them by a French arbitration court last year, amid a long-running dispute with the Malaysian Government over a colonial-era land deal.

Malaysia, which did not participate in the arbitration, maintains the process was illegal and has obtained a stay on the ruling in France.

Despite the stay, a French judge in December 2022 granted the heirs' request to seize three Malaysian Government properties in Paris to settle a debt of €2.3mil (RM10.98mil) that they said was owed to them, according to court documents shared by the heirs' lawyers to Reuters.

Malaysia had been ordered to pay the heirs the sum under a preliminary arbitration award granted to them in Spain, which was not bound by the stay in France, the lawyers said.

The French judge further found that the properties, located in the 16th arrondissement (administrative district) near the Malaysian embassy in Paris, did not qualify as diplomatic premises, according to the court documents.

Unlike the embassy, they bore no official signage and were not subject to French tax exemptions, the judge said.

The award is enforceable globally against most Malaysian assets, aside from diplomatic premises, under a United Nations convention on arbitration.

The French bailiffs attempted to evaluate the three properties in preparation for a sale but were turned away, the lawyers were reported as saying adding that the proceeds of the sale would go to the heirs.

The Malaysian Government and the French court, the Tribunal Judiciaire de Paris, did not immediately respond to requests for comment.

The Paris properties are only the third set of Malaysian assets that the heirs have publicly acknowledged going after.

Last month, Luxembourg court bailiffs issued fresh seizure orders for two PETRONAS companies – PETRONAS Azerbaijan and PETRONAS South Caucus in a similar effort.

The company has said the heirs' actions were baseless and that it would continue to defend its legal position.

On Feb 17, PETRONAS said in a statement that claims by the purported Sulu heirs on two of its subsidiaries in Luxembourg were baseless and it would continue to defend its position from a legal aspect.

Malaysia has previously vowed to take all legal measures to protect its assets worldwide.

The dispute stems from a deal signed in 1878 between two European colonists and the sultan of Sulu for use of his territory in present-day Malaysia – an agreement that independent Malaysia honoured until 2013, paying the monarch's descendants a token sum annually.

Kuala Lumpur stopped the payments after a bloody incursion in 2013 by supporters of the former sultanate who wanted to reclaim land from Malaysia. The heirs of the sultan, who once controlled a territory spanning rainforest-covered islands in the southern Philippines and parts of Borneo island, say they were not involved in the incursion and sought arbitration over the suspension of payments.