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1:22pm 07/08/2022
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The Sulu arbitration decision is a direct affront to Malaysian sovereignty
By:Murray Hunter

The “Seizure Notice” issued in Luxembourg against assets owned by Petronas in response to the US$14.92 billion award by Spanish arbitrator Gonzalo Stampa is a direct affront towards Malaysian sovereignty.

Worse still, Malaysia has fallen victim to a scheme by the rogue and partial arbitrator Stampa, in a scheme to extort a sovereign nation, in this case Malaysia.

What should make Malaysians even angrier is that European courts of law are collaborating in what should be considered legal-imperialism by allowing claims to be heard that interfere with the sovereignty of the post-colonial world.

US lawyer Paul Cohen who according to his Linkedin page is also an international arbitrator like Stampa, took on the case of a number of purported descendants of the Sultan of the long defunct Sultanate of Sulu, with the claim being funded by an opportunistic speculative litigation funder Therium Company.

What followed was an illegitimate decision in a flawed and manipulated arbitration hearing which moved location to avoid being closed down, over an absurd claim.

Rather than Malaysian commentators bringing up concerns over the great injustice that has been done to Malaysia, the attack on Malaysian sovereignty by rogue legal agents, exploiting the European arbitration legal framework.

What one must understand from the very beginning, the US$14.92 billion decision, a figure well out of proportion to the remedy, was not made by a formal court of law or any international law court like the International Court of Justice.

The decision was made through a freelance arbitration lawyer Gonzalo Stampa who through his own admission has a limited experience as an arbitration judge.

What more, Stampa’s own CV indicates that he has little or no experience in historical treaties and sovereignty issues.

He is a commercial lawyer and sometimes arbitrator, where all parties mutually agree for an out-of-court arbitration.

The question must be asked, how did this case end up in front of a person unqualified for the case? Stampa is not a member of any nations judicial system.

The arbitration sessions were only housed within the Spanish and French court houses, not formal court sessions held under the judgement of nationally appointed judges.

From the facts and circumstances involved it strongly appears the Government of Malaysia has been the target of an attempted scam using European courts as cover.

Absurdity

The very nature of the claim is absurd. The supposed claim arises from an 1878 grant which ceded ownership and sovereignty in perpetuality of parts which are now present-day Sabah, to the now defunct British North Borneo Company.

As the notable Malaysian lawyer Tan Sri Tommy Thomas has pointed out on a number of occasions, the agreement was a legacy of empire in the annuls of history.

The endorsement, and reindorsement to other parties over history, should not be recognized on the basis of any laws, and thus not subject to the jurisdiction of any arbitration of remote and foreign parties in far off lands.

Proof of this lies within the agreement itself, where the contractual bargain is mentioned below:

Grant by Sultan of Sulu of Territories and Lands on the Mainland of the Island of Borneo. Dated 22nd January, 1878. We … Sultan of Sulu … hereby grant and cede of our own free and sovereign will to Gustavus Baron de Overbeck of Hong Kong and Alfred Dent Esquire of London as representatives of a British Company … forever and in perpetuity all the rights and powers belonging to us over all the territories and lands In consideration of this grant … to pay as compensation to the sultan the sum of five thousand dollars per annum. In case any dispute shall arise between His Highness the Sultan, his heirs or successors and the said Gustavus Baron de Overbeck or his company it is hereby agreed that the matter shall be submitted to Her Britannic Majesty’s Consul-General for Borneo.”

Any remedy within the above agreement was limited to Her Britannic Majesty’s Consul-General for Borneo, a now long defunct office.

Reading the above agreement any other way than was intended would lead to a consequential precedent that would turn-over the world as we know it today.

Ex Gratia payments

Many have argued that the agreement is valid because the Government of Malaysia took over the annual payments from the British Government back in 1963, when Malaysia came into being. However, there are strong argument these payments were of an ex gratia nature.

The cessation of the annual payment after the Lahad Datu invasion occurred in 2013 was not a breach of contract, but rather a displeasure by the Government of Malaysia over an incident many needlessly lost their live to.

In fact, if the contract was valid, the descendants of the Sultan of Sulu could be rightfully construed as breaching the contract in their attempt to take back the lands subject to the agreement.

Why wasn’t this breach of contract considered in the arbitration?

In fact, the Government of Malaysia offered a remedy to the arbitration claim in 2019 by agreeing to pay the RM48,230 outstanding from the cessation of annual payments in 2013. This would have ended the arbitration fulfilling the scope of the said agreement, but was rejected by Paul Cohen.

An old agreement can’t be turned into a new agreement

According to a letter dated 21st October 2019, Paul Cohen attempted to have the agreement rewritten by revaluing the agreement into today’s monetary terms.

Stampa’s award appears to have accepted this argument. This is way outside the terms of the arbitration action, having no legal basis.

Unanswered questions

How does a Spanish court acquire jurisdiction over a matter that has been specifically specified that must be handled by Her Britannic Majesty’s Consul-General for Borneo?

The British Government refused to have anything to do with the claim, and the High Court of Sabah should be the natural forum to hear any claims. This was reaffirmed in 2020.

Stampa chose to disregard the 2020 court ruling, showing great disrespect to Malaysian court jurisdiction over this matter.

There appears to be no mutual consent for the commercial arbitration provided over this matter.

Any arbitration requires the consent of all parties to the dispute. This made the whole hearing a frivolous one.

Malaysia made representation to the Spanish courts claiming they had no jurisdiction over the issue.

When Malaysia gained a stay of proceedings, Stampa and Cohen moved to Paris and continued the arbitration, where the French court also issued a stay of proceedings notice to the arbitration.

Consequently, any decision by the Stampa Arbitration hearing has no validity in law because it has no jurisdiction and no legitimacy.

Stampa himself is under criminal investigation in relation to the matter.

Malaysia has been subjected to an elaborate legal scam using the European arbitration process as a cover.

This is an outright attack upon Malaysian sovereignty, where Malaysian politicians and critics have used this event to gain political points over politicians.

What everyone is not seeing is the attempt to impose legal-imperialism over Malaysia.

Stampa and Cohen have acted illegally over this matter and must be investigated and brought to justice to protect other nations over this type of legal scam in the future.

Both Spain and France should be censured for allowing this to happen within their court systems.

This did not occur because of the incompetence of Malaysian politicians and civil servants. It was an elaborate scheme aimed directly at Malaysia in an act of extortion.

(Murray Hunter has been involved in Asia-Pacific business for the last 40 years as an entrepreneur, consultant, academic and researcher. He was an associate professor at Universiti Malaysia Perlis.)

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