KOTA KINABALU, July 4 — The federal government will table a State Immunity Act in Parliament later this year with the aim of discouraging frivolous lawsuits against other countries from being launched here, said Datuk Seri Azalina Othman Said.

The minister in the Prime Minister’s Department (Law and Institutional Reforms) said its purpose was to codify the principle of state immunity as part of Malaysian law to protect the sovereignty of foreign states against vexatious lawsuits filed here.

"In the near future, the Madani government will legislate a State Immunity Act.

"This law would reflect the general principles of international law on sovereign immunity, including effective service on foreign states, to uphold the rights and interest of parties concerned, safeguard the sovereignty of states and to preserve and promote friendly relations with other states,” she said when speaking during the International Arbitration Colloquium 2023 via Zoom here.

"With this, it is hoped that reciprocal treatment will be accorded to Malaysia in the event Malaysia is brought to the courts of a foreign state in the future,” she said.

Azalina said that the Bill should be tabled during the parliamentary meeting at the end of the year.

She said that the recent Sulu claimant’s case presented a complex dispute but Malaysia ultimately maintained its sovereignty following the legal battle in European courts.

Azalina said that customarily in international law, no state should be subject to the court jurisdiction of another state.

"The Malaysian government has been consistently raised its objections against the claimants’ blatant attempt in forum shopping, the jurisdiction of the arbitrator, the continuation of arbitral proceedings despite the Spanish Court’s orders, the unprecedented shift in the seat of arbitration, as well as the delivery of the purported ‘final award’,” she said.

She said that the case, financed by international litigation firm Therium, was frivolous in nature and undermined the ethical conduct, integrity, professionalism, and good practices of arbitrators, which was the cornerstone of any legitimate commercial arbitration.

"It is fundamental to preserve the confidence of any parties who chose arbitration to settle their dispute, failing which, could cause the whole arbitration system to be undermined.

She said that Malaysia has received tremendous confidence from the recent landmark decision by The Hague Court of Appeal on June 27, which was the first decision that rejects the Sulu claimants’ attempt to recognise and enforce the purported final award.

Azalina said the decision was based on three grounds: firstly, that no final award could have been rendered since the annulment of Spanish arbitrator Gonzalo Stampa, second there was no valid arbitration agreement and lastly the exceptional stay of enforcement of the final award in Paris which it void of recognition and enforcement in the Netherlands.

"It is hoped that the success obtained through The Hague Court of Appeal decision will contribute to subsequent successes in ongoing proceedings commenced by the government in challenging the recognition and enforcement of the purported final award in other jurisdictions, including in Luxembourg,” she said.

Azalina said that the Malaysian government will continue its efforts to annul the award in the Paris Court of Appeal, including taking the necessary legal action against Therium over the claim.