Sulu case: A lesson for Malaysia to be careful in matters involving international arbitration

KOTA KINABALU: The Sulu arbitration case is a lesson to learn for Malaysia to remain cautious on vagaries involved in international arbitration, says former foreign minister Tan Sri Anifah Aman.

He said the Sulu case shows the need for Malaysia to be careful in dealing with such matters of national interest, especially when the so-called claimants are only motivated by money.

He said Malaysia and Philippines enjoyed good relations but these so-called claimants abused the process of international arbitration to pursue their own personal benefits through the help of a rogue arbitrator.

"My stance during my time as the foreign minister (2008-2018) was not to recognise any claims on Sabah at all even though we had excellent bilateral relations with the Philippines.

"And because we did not even entertain these baseless claims at that time, there was no question about the so-called Sulu heirs daring to initiate an arbitration," Anifah said, adding that they had no basis for it.

He said this at the International arbitration colloquium - Sabah Edition, on state sovereignty and immunity in commercial arbitration here Tuesday (July 4).

"Although one hand alone cannot clap, even the slightest misstep would allow for opportunists to seize the chance to force the government to engage in their frivolous games to defend national sovereignty and integrity," he said.

Anifah said international arbitration processes should have the right balance between transparency, legitimacy and legality on the one part and flexibility on the other.

"The Sulu case not only exemplifies the vagaries involved in an international arbitration, but also pushes to the front in a real situation the many challenges to be grappled with, towards ensuring fair justice to all parties involved in international arbitration processes," he said.

He said in the first place, the parties must agree to arbitrate, to submit to the jurisdiction of the arbitral process and to have a level-playing field.

Anifah, who is the special advisor to the Chief Minister on international relations and foreign investments, said there can be no room for unilateralism.

He said the case of the so-called Sulu heirs’ attempts to appoint their own arbitrator where no agreement to arbitrate exists is one clear example.

"It is not possible for one party to thrust international arbitration as a platform for dispute resolution on a non-consenting party simply to achieve their own desired outcomes," he said.

"So actually, I would hesitate to classify the Sulu case as an ‘international arbitration’, simply because Malaysia did not even agree to participate in the arbitral process," said Anifah.

He said the worldwide media attention to this Sulu case has actually served some purpose in highlighting the challenges faced by the global arbitration system and potential abuses arising from gaps within that system.

He said the New York Convention is intended to facilitate the recognition and enforceability of only legitimate foreign arbitral awards.

"Under no circumstances should our international community be belittled or abused, especially when it threatens our national assets and ignores our sovereign immunity," Anifah said.