Azalina: Malaysia awaits Spain's court ruling on 'rogue arbitrator' Stampa, hopes for Sulu case's end with justice for Malaysians

KUALA LUMPUR, Dec 11 — Malaysia is currently awaiting the Madrid Criminal Court in Spain to give its decision — at a future date — on whether arbitrator Gonzalo Stampa has committed crimes when he insisted on ordering Malaysia to pay US$14.9 billion in the Sulu case, minister Datuk Seri Azalina Othman Said said today.

After attending the Madrid Criminal Court's hearing today of the criminal case against Stampa, Azalina expressed hope that the Sulu claimants' claim against Malaysia for compensation over land in Sabah would come to an end if Stampa is convicted.

Describing Stampa as a "rogue" arbitrator, Azalina expressed hope that if he is convicted in Spain in this criminal case, it would "put an end not only to the Sulu claim, but also bring justice to the people of Malaysia, and also would be something that other countries in the world must also appreciate what Malaysia is doing — so that no rogue arbitrator out there will use a fraud award to try and enforce an order against a sovereign state, a legitimate country".

Speaking to Malaysian media in an online video-conferencing session, Azalina stressed that Malaysia is not against commercial arbitration as a platform or as an alternative dispute resolution method, but was against the "rogue" arbitration that was carried out by Stampa against Malaysia in the Sulu case even after Spain cancelled his appointment as arbitrator in the case.

"It's very obvious that we went on a premise that we are not against commercial arbitration platform, but we are not going to be bullied and forced to abide by an order of an arbitration court and an arbitrator that has been unfairly behaving in a rogue manner towards Malaysia and the people of Malaysia," she said, adding that Malaysia hopes to pass a State Immunity Act in Parliament next year to prevent a repeat of such a situation.

In the criminal case today, the Spanish Public Prosecutor's Office and Malaysia (as the complainant) had accused Stampa of the criminal offence of serious contempt of court, while Spain's Public Prosecutor's Office had also accused him of unqualified professional practice.

Azalina explained the importance of the pending decision by the Madrid Criminal Court in Stampa's criminal case, as it will decide if he had the legitimacy or the powers to issue the arbitration award of US$14.9 billion against Malaysia in 2022.

Azalina said the Madrid High Court of Justice had in 2021 annulled or cancelled its initial 2019 appointment of Stampa as the arbitrator in the Sulu claimants' case against Malaysia, and said Stampa should have followed the Spanish court's order instead of carrying out "unethical and unprofessional" conduct by moving the arbitration proceedings to France before ordering Malaysia to pay US$14.9 billion to the Sulu claimants.

Azalina observed that during the hearing in the criminal case in Spain this morning, Stampa and his lawyer "did not deny the fact that the court or the court clerk had repeatedly informed him" that he had to stop the arbitration proceedings in the Sulu case following the annulment of his appointment as arbitrator.

"And he still refused, he was very adamant to pursue his position as an arbitrator. So when we were in court, when I heard the defence counsel or he himself, never denied the fact that they were contacted by the court clerk. They are aware. So he can't say that he was not aware he was ordered to stand down and stop, he was very, very much aware," Azalina said, adding that these notifications by the court in Spain to Stampa were done in writing.

Azalina argued that Stampa actually had no legitimacy to act as an arbitrator in the Sulu case, and considered his arbitration award of US$14.9 billion against Malaysia to be a "fraud award".

She said the Spanish Constitutional Court had also upheld the annulment or cancellation of Stampa's appointment as the arbitrator in the Sulu case. The Spanish Constitutional Court had dismissed a constitutional appeal by the Sulu claimants — who are also citizens of the Philippines.

She highlighted that Stampa had collected over US$2.5 million in fees from the Sulu claimants in advance of the issuance of his arbitration award of US$14.9 billion against Malaysia.

As for the criminal court proceedings in Spain against Stampa today, Azalina said the prosecution called in Malaysia's ambassador to Spain as the sole witness to confirm he was the one who submitted a complaint on December 14, 2021 regarding Stampa's conduct.

Azalina said the Madrid Criminal Court was also told this morning that this affects Malaysia's right to sovereign immunity.

Azalina said both the prosecution and the defence had already completed their submissions at the Madrid Criminal Court today, which means hearing for the criminal case has concluded and that all involved will next wait for the court to fix a decision date.

In a statement tonight on the case, Azalina also said the criminal case against Stampa is not over his role as an arbitrator, but is over his alleged contempt of court by disobeying the Madrid High Court's court orders regarding the annulment of his appointment as an arbitrator.

Azalina highlighted the need to uphold arbitrators' ethical code of conduct and professionalism in order to preserve the confidence of those who choose to settle their disputes through arbitration, as it could otherwise result in the undermining of the entire alternative dispute resolution platform.

"Malaysia has full faith in the criminal justice system of Spain and the importance of these proceedings in upholding the sanctity of international arbitration," she said, having also expressed confidence in Spain's courts to deliver "justice" to Malaysians in this case.

Among other things, Azalina told Malaysian media that commercial arbitration is usually when those involved in a dispute had agreed to go for arbitration and that both had been heard through the arbitration process before an arbitration award can be enforced.

But she said Stampa's appointment as arbitrator in the Sulu case was nullified, and that Malaysia disagrees with being brought to arbitration as it is a sovereign country and not a company.

She also questioned the way Stampa carried out the arbitration process as she highlighted his receiving of US$2.5 million in arbitration fees from the Sulu claimants, ultimately arguing that the arbitration in the Sulu case was illegal as it allegedly went against international arbitration laws and did not follow the due process under the law.