JULY 19 — Recent news once again surprised the nation with the alleged claim from the Sulu’s heirs on the assets that purportedly have been seized by them.
Such a report was not the first time, given the fact that such an issue was brought to our attention in 2019. The Sulu heirs commenced an arbitration proceeding in Spain, in 2019. However, the arbitration award delivered by Gondoza Stampa was not recognised by Malaysia.
Following that, Malaysia then applied to strike out the award. In return, Stampa brought the said decision to France to enforce it. Malaysia is a signatory to the New York Convention, and the arbitration decision made by Stampa, concerning the compensation of a sum, of USD 14.92 billion to the heirs of Sulu was upheld in France’s court.
This act of Stampa is known as forum shopping, and this was explained by an independent writer, in his article.
There were two reasons why the Malaysian government made such a decision, an anti-arbitration injunction having been given to restrain foreign arbitration proceedings by the High Court.
This was laid down in the case of Government of Malaysia v Nurhima Kiram Fornan & Ors [2020] MLJU 425.
Firstly, it is on the principle of sovereign immunity. Malaysia has sovereign immunity from foreign judicial and arbitration proceedings unless waived. Secondly, according to the principle of the proper forum, Sabah High Court is the proper forum to determine the dispute, being the successor of the former State of North Borneo.
Thus, the question arises of how did the enforcement of the Paris award takes place in Luxemburg? There are a few conclusions that can be drawn from the situation above. Firstly, perhaps the Malaysian government had delayed in applying to set aside the award, thus allowing the Sulu heirs to enforce the arbitration award in Luxemburg.
Secondly, the court in Luxembourg can enforce the arbitration award based on their New Code of Civil Procedure (NCCP), as explained by Hafiz Hassan in his article.
The award given under France’s jurisdiction was recognised and enforceable because, the courts declared the enforcement based on Article 1251 of the NCCP, and not based on the New York Convention.
Despite the fact, that Malaysia does not recognise the arbitration award, Malaysia is a signatory to the New York Convention, which gives rights to the Sulu heirs to enforce the award against Malaysia’s property.
However, such non-recognition from Malaysia is not needed if the enforcement of the arbitration award is enforced according to the New York Convention.
Nevertheless, it’s not to say all is lost, as the Malaysian Government has two choices either, they can set the arbitration award aside, as they are doing now, or another alternative would be to resist the enforcement of the award around the world that goes by a case-to-case basis.
Hence, if a stay is applied, to the country member of the New York Convention, the stay only has its effect in that country, and not on any other parts of the world that are signatories to the New York Convention.
Hence, the enforcement of the award can still be challenged.
Perhaps, the saga of the Sulu Heirs is to be continued.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
