Focus on setting aside Stampa's 'tainted award' to Sulu heirs, says senior lawyer

KOTA KINABALU: Malaysia should stay vigilant against attempts to enforce the US$14.9bil (RM69.3bil at current rates) award to the self-styled Sulu heirs despite a Spanish court's decision to convict rogue arbitrator Gonzalo Stampa, says a senior lawyer.

"The focus should be on setting aside the award in the Paris courts, not (on) the arbitrator," said former Sabah Law Society president Datuk Roger Chin.

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He said the enforceability of the tainted award remains a threat until the French court makes a final decision to set aside Stampa's final order for Malaysia to pay up.

"The Paris Appeal court's final decision on the enforceability of the award remains pivotal," he said when contacted on Wednesday (Jan 10), adding that so far there is a stay order on the award.

"The impact of Stampa's conviction on enforcing the French arbitration award is uncertain and depends heavily on the specific legal context and interpretation of the New York Convention in each country.

"While it could bolster Malaysia's arguments and increase scrutiny of the award, it's not a guaranteed path to blocking enforcement," he added.

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"France may be less inclined to enforce an award tainted by irregularities. Stampa is likely to appeal his conviction. This could prolong the legal saga," he said.

Earlier this week, Stampa was convicted in Spain for contempt of court and an invalid judicial appointment.

He was sentenced to six months' imprisonment and suspended from practising for a year.

"The New York Convention's specific grounds for refusing enforcement are narrow. Stampa's conviction alone might not meet the specific criteria for refusal in some countries, like if they only recognise 'grave misconduct' as a valid ground," Chin noted.

He cautioned that some countries might focus on the content of the award itself and decide it was valid irrespective of Stampa's actions.

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"While the conviction could raise doubts, the core issues like the 1878 Sulu agreement with the then-Sulu kingdom might still be considered," he said.

As such, he said that if Malaysia participates in enforcement proceedings without raising Stampa's conviction as grounds for refusal, some countries might interpret this as a waiver of such objections.

Nonetheless, Chin said, Stampa's conviction strengthened Malaysia's position.

"It could bolster Malaysia's argument that the arbitration award was flawed and should be set aside in the Paris Court of Appeal.

"His (Stampa's) disregard for the Spanish court's decision raises questions about the validity of the entire arbitration process," Chin added.