KUALA LUMPUR, March 2 — Malaysia will not recognise the recent arbitration proceedings and subsequent award by a court in France to the purported heirs of the Sulu Sultanate, and maintains its sovereign immunity, said the Foreign Ministry and attorney general (AG) in a joint statement here today.

The statement said that the Spanish High Court had decided in June 2020 that due process leading to the appointment of the arbitrator was not properly served or consistent with the Spanish High Court of Justice of Madrid’s case laws on the service of process on sovereign states.

"As a consequence of the Nullification Decision, Dr Stampa is not an arbitrator in the purported arbitration proceedings and, therefore, all his decisions, including the Final Award, are null and void.

"The Government of Malaysia completely rejects the purported Final Award dated February 28, 2022, which was rendered by Dr Stampa,” it said in reference to Gonzalo Stampa.

The Foreign Ministry and AG said the award rendered by Stampa on February 28 not only violated Malaysia’s sovereign immunity, but also was rendered in disregard of the Madrid and Paris court decisions.

"The Government of Malaysia strongly opposes the Final Award and upholds its position and stance to not recognise all the actions taken by Dr Stampa in the purported arbitration proceedings as well as all his illegal decisions and awards,” said the statement.

It said that Malaysia did not participate in the purported arbitration proceedings because it did not recognise the claim and that it had always upheld and never waived its sovereign immunity as a sovereign state.

The Foreign Ministry and AG said the Spanish public prosecutor has filed a criminal complaint against Stampa for serious contempt of court and professional intrusiveness.

They also said that the subject matter of the claim is not commercial in nature and thus cannot be subject to arbitration and the 1878 Agreement contains no arbitration agreement.

"We further stress that the claimants’ identities are doubtful and have yet to be verified.

"Malaysia will continue to take all necessary actions, including legal actions, to put an end to the claim and to ensure that Malaysia’s interests, sovereign immunity and sovereignty are protected and preserved at all times,” they said.

It was recently reported that a French court had ordered Malaysia to pay the heirs of the now-defunct Sulu Sultanate up to US$14.92 billion (RM62 billion) for violating a land lease made in 1878 between the Sultan of Sulu at the time Sultan Mohamet Jamal Al Alam and Baron de Overbeck and Alfred Dent where the former granted and ceded sovereign rights over certain territories located in North Borneo.

As a token, RM5,300 per year was to be paid to the then Sultan of Sulu, his heirs or successors. However, Malaysia stopped paying after the Lahad Datu armed invasion in 2013.

On January 14, 2020, the High Court of Sabah and Sarawak heard a case by the heirs and declared that the 1878 Agreement did not contain any arbitration agreement; that Malaysia had never waived its sovereign immunity; that the arbitrator had no jurisdiction to resolve the matter; and that the Sabah Court is the natural and proper forum to determine any claim in connection with the 1878 Agreement.

Malaysia has also filed for the recognition and enforcement of the Sabah High Court decision in the Spanish High Court of Justice of Madrid but the application has yet to be heard.