Petronas

On 12 July 2022, it was reported that two Petronas subsidiaries in Azerbaijan had been seized by bailiffs after a French arbitration court ruled in March that Malaysia had to pay the descendants of the sultan of Sulu at least RM62.59 billion.

The Financial Times reported that the move to seize the petroleum company’s Luxembourg-registered subsidiaries, Petronas Azerbaijan (Shah Deniz) and Petronas South Caucasus, was part of legal efforts launched in 2017 by the heirs to receive compensation for land in Sabah they said their ancestor leased to a British trading company in 1878.

The claim was made during the proceedings at the Paris Arbitration Court in France.

The dispute has its origin in the 1878 Deed of Cession between the then Sultan of Sulu, Sultan Jamal Al Alam, and Baron de Overbeck, the then maharaja of Sabah, and British North Borneo Company’s Alfred Dent.

Petronas become new center of attention due to arbitration award to Sulu Heir in last June.

Under the agreement, Jamal ceded sovereignty over large parts of Sabah to Dent and Overbeck, who agreed that they and their future heirs were to pay the heirs of the sultan 5,000 Mexican dollars annually.

In 1936, the last formally-recognised sultan of Sulu, Jamalul Kiram II, died without heirs, and payments temporarily ceased until North Borneo High Court chief justice Charles F Macaskie named nine court-appointed heirs in 1939.

Although Malaysia took over these payments when it became the successor of the agreement following Sabah’s independence and the formation of Malaysia in 1963, these payments – equivalent to RM5,300 a year – ceased in 2013 after an incursion by armed men into Lahad Datu, along the eastern coast of Sabah.

Lahad Datu 2013 witnessed the incursion of armed militia loyal to Sulu’s Sultanate.

Malaysia will consider itself lucky when A French court has reportedly granted Malaysia a stay of a US$15 billion award won by heirs of the Sulu Sultanate. According to Global Arbitration Review, the court made the decision yesterday after finding that its enforcement could infringe on the country’s sovereignty.

Minister in the Prime Minister’s Department (Parliament and Law) Datuk Seri Dr Wan Junaidi Tuanku Jaafar said Malaysia had obtained a stay order on the RM63bil award.

He said the Paris Court of Appeal allowed an application by the Malaysian government to suspend enforcing the final award dated Feb 28 following claims by parties who alleged that they were heirs and successors in interest to Sultan Jamalul Kiram II through an international arbitration proceeding in Madrid.

With the stay order, the final award, which had been obtained by Spanish arbitrator Dr Gonzalo Stampa earlier, could not be enforced in any country pending a decision by the French court on the finality of the matter.

Wan Junaidi said the government was currently making preparations for the hearing to quash the final award, although a hearing date had yet to be fixed. Malaysia also filed criminal proceedings against Stampa for contempt of court in Madrid, which is ongoing.

However, Lawyers for the claimants, said the February ruling remains legally enforceable outside France through the New York Convention, a United Nations (UN) treaty on international arbitration recognised in 170 countries.

It means with some exceptions, such as diplomatic premises, any Malaysian government-owned asset within a nations party to the UN convention is eligible for enforcing the award,

On Monday (July 18), an Opposition MP, Isnaraissah Munirah Majilis (Warisan-Kota Belud), was suspended for two days for urging the House to address the matter of the Sulu claim on PETRONAS’s assets and Sabah.

The irony is that on Monday (July 18), the Sabah state assembly also unexpectedly rejected a motion to debate issues relating to claims by self-proclaimed heirs to the defunct Sulu Sultanate, among other matters. It appeared to be a matter better debated in the federal Parliament because it involved federal laws and jurisdiction.

Spanish arbitrator Dr Gonzalo Stampa obtained final award for Sulu Heirs.

Najib as an opportunist has played this issue to turn it into an advantage for him. Najib Razak has blasted PH for blaming him for the Sulu issue when it was the Pakatan Harapan government’s “ignorance” that made it worse.

He said the PH government did not do anything when the Sulu heirs made claims that the country had failed to make annual payments after the death of the formally recognised Sultan of Sulu, Jamalul Kiram II.

Najib added that to make matters worse, the PH-appointed attorney-general had written a letter acknowledging the Sulu heirs’ claims and offering a payment of RM48,300. He described the action as “the biggest mistake” under the PH government.

To add salt to the wound, on  19 July 2022, PKR lodged a wave of police reports against Najib Razak, internal information reveal that the Police have received more than 150 police reports nationwide, about his negligence in dealing with claims by the heirs of the Sulu sultanate. This is due to the failure to act on the claims by the self-proclaimed heirs of the Sulu sultanate. after halting the lease payment to the heirs in 2013.

A court document shows that the notice of the suit was sent in 2017 when Najib was still prime minister.

Some will say it is useless to make a police report against Najib but WR sees this as a strategy by Rafizi to unite back PKR after the party election which could cause friction among the camp. And he succeeded in doing so.

Recent Sulu claims have created the next level rivalry between Najib and Rafizi at social media.

Najib and Rafizi have made a series of attacks and counter-attacks on social media over the past few months since Rafizi made a comeback to active politics after a two-year absence, standing for election to fill the vacant post of PKR deputy president.

Meanwhile, Petronas said it was taking steps to protect the legal position of all its global assets after two Luxembourg-based subsidiaries were served with a seizure notice last week over a dispute with the heirs of a late sultan.

The steps Petronas was taking include engaging legal counsel, as a repone Malaysian Government A special team will draft action plans to address claims made by the self-proclaimed heirs of the Sulu sultanate

It will also comprise Foreign Minister Datuk Seri Saifuddin Abdullah, Attorney-General Tan Sri Idrus Harun and experts on international arbitration and led by the Ministry of Law.

We welcome the afford by the government views seriously the issues that threaten the interest of national assets in foreign countries by the heirs of the Sultan of Sulu, particularly assets under government-linked companies.

To protect our national assets and sovereignty, the government must take proactive and forceful efforts to solve this issue.

The nature of the Sulu legal salvo is what makes this situation unusual for WR as well. Rather than regaining Sabah, it targeted Malaysia’s most important asset: Petronas. If the legal claim is based on The Sulu Sultanate’s possession of Sabah, shouldn’t the lawsuit centre fully and only on the state?

The demand for Malaysia to pay RM62.59 billion to the Sulu Sultan’s heirs is unreasonable, The unpaid amount, however you count it, is less than RM60,000. Even with interest, it doesn’t amount to anywhere near even RM1 billion, let alone over RM60 billion.

Recent move show Sulu Heirs have targeted national strategic asset, Petronas.

The weirdest aspect is that these historical facts are recorded by Don Carlos Cuarteron, who documented these historical occurrences in his journals, which are now available in Mike Gibby’s book “Crowned with the Stars.”

Because of his journals, we can now determine the Sultan of Sulu’s true intentions in terms of why he consented to the stipulations proposed by Dent and Overbeck and signed the agreement in 1878.

After 300 years of terrible battle and carnage, the Sultanate of Sulu was forced to surrender to the Spanish in July 1878. This final capitulation effectively terminated the Sulu’s dominance in the region.

So, on what basis did the Sulu Sultanate ever have any claim to Sabah as the royal household were neither originally from Sabah, never lived in Sabah nor had any ancestorial claims to the territory in any capacity going back in time.

There were no palaces, no cities and no centres of administration of the Sulu Sultanate in Sabah, unlike the Brunei Sultanate which was based in Borneo and historically ruled most of Borneo for almost 6 centuries and had vassals and administrators and Bajau Samah armies based in Mengkabong, Putatan, Abai, Kinarut and even in Marudu. Until the cessation of Sabah in 1877, the entire west coast of Sabah was controlled by the Brunei Pangerans and their Bajau Samah warriors.

If we talk about rights, I think Brunei has more legal rights than Sulu.