There are just three main villains in the Sulu sultanate claim of parts of Sabah and an outlandish, highly dubious nearly US$15 billion award made against Malaysia, resulting in a seizure notice for the assets of national oil corporation Petronas in Luxembourg.
Topping the list is the one who stopped the payments under an 1878 agreement of a mere RM5,300 a year to the Sulu sultanate in 2013. Malaysia, under the then prime minister Najib Abdul Razak, who ultimately bears responsibility for this, decided to stop payment following a Sulu incursion into Sabah in 2013 which resulted in several police deaths.
The other two villains are the British lawyer Paul Cohen, counsel for the Sulu claimants who brought the opportunistic, ludicrous claim to the Spanish court and then the French court, and the Spanish arbitrator Gonzalo Stampa, the sole arbitrator who made the ridiculous award without so much as referring to Malaysia.
Stopping the payments was a politically motivated move by Najib to show he was tough against the Sulu incursion, but never fully explained in public - he still has not. Najib should or must have been advised by the then attorney-general Abdul Gani Patail as to the legal consequences of stopping payments. Still, it seems to have completely escaped his attention that there was a clear legal obligation with the precedent of payment for 50 years by Malaysia!
Najib is now trying to push the blame on former AG Tommy Thomas who merely tried to settle the mistake of not paying the required amount in 2019 by offering to pay the claimants the outstanding amount plus interest, the normal terms for breach of agreement. The total offered amounted to a mere RM48,230.
Thomas, in a lengthy comment carried by a number of publications including Malaysiakini, has set out the most comprehensive and compelling account of the Sulu claims that I have read. He persuasively argues that the agreement holds. This is especially so since the Sabah incursion could not be conclusively linked to the heirs of the sultanate.
By not sticking to the terms of the agreement, and unilaterally stopping payments, Najib allowed the floodgates of legal action to be opened and for unscrupulous lawyers, arbitrators and the vulture funds backing them to put pressure on the Malaysian government and force a lucrative settlement.
One has to bear in mind that the payments have been made by Malaysia for some 50 years since the formation of Malaysia, solidifying the agreement as being in effect by both parties. Thus, it was extremely foolhardy to breach that agreement.
So Najib, more than any other person, is culpable for this major mistake made at a time when the 1MDB issue and his role in it were unravelling in 2013 beginning with a series of articles in KiniBiz and Malaysiakini. Perhaps he was distracted.
There has been no dispute over the 1878 grant which ceded parts of Sabah by the Sulu sultanate to British interests, then passed on to the British government and eventually to Malaysia when Sabah became part of Malaysia in 1963.
Under the agreement, the territories were ceded in perpetuity to British interests in return of a payment of 5,300 dollars annually which was paid regularly by the British interests, the British government and the Malaysian government for 135 years. Until Najib made his infamous decision.
‘Scandalously opportunistic’
As explained by Thomas in his article, the claim by Cohen and the award by Stampa have no basis.
“It is hopelessly remote and scandalously opportunistic by any yardstick. As I previously mentioned, title, ownership and sovereignty of the lands ceded in 1878 passed at the date of the Grant, and never belonged to the Sultan of Sulu from Jan 22, 1878. Hence, any claim thereafter to the land is not sustainable in law.
“No such claim was made for the next 130 years; it surfaced for the first time in the Spanish arbitration. It is a claim that has no basis in fact or law. What the Sulu claimants are demanding is a unilateral re-writing of the 1878 Grant. No doubt Stampa, when awarding US$14.9 billion in his Award, re-wrote the terms of the 1878 Grant.”
There is no provision for arbitration but there is a reference that any dispute should be referred to the Consul-General for Borneo, a position that no longer exists. Thomas is rightfully indignant and aghast that a sovereign issue is being decided in foreign courts.
He says: “‘State immunity’ is a well-established rule of customary public international law whereby countries cannot be sued in the domestic courts of other countries against their will. The 1878 Grant was not a commercial agreement, but an act of a sovereign to cede territories.
“Accordingly, as a sovereign, independent nation, Malaysia is immune from the jurisdiction of the courts of Spain and France. As stated by Lord Wilberforce in the House of Lords’ case in I Congreso Del Partido [1983] 1 AC 244:
“It is necessary to start from first principle. The basis upon which one state is considered to be immune from the territorial jurisdiction of the courts of another state is that of ‘par in parem’ which effectively means that the sovereign or governmental acts of one state are not matters upon which the courts of other states will adjudicate.”
One needs to read the full article by Thomas to realise how strong a case Malaysia has against the Sulu claimants. But what is sorely lacking is that Malaysia has not made its case and its proposed actions public.
It should state publicly that it will never settle the Sulu claim in any court anywhere and will not pay a cent in any settlement beyond what was offered earlier in a letter to Cohen by Thomas in 2019 - RM48,230.
It should file criminal charges against Cohen and Stampa and sue them, if that’s possible, for taking this malicious, opportunistic action against Malaysia. It should complain to professional organisations about their unethical and even criminal behaviour.
It should consider action against legal vulture funds providing finance for this action such as Therium which provided such funding for a huge cut of the eventual claims.
Only by taking such action aggressively, publicising them intelligently and demonstrating the futility of the actions by publicly disclosing what they intend to do can they hope to discourage these ridiculous, outrageous claims by highly unscrupulous people and crooks.
And they must never agree to any third-party negotiations to strike a deal ala Jho Low and 1MDB brokered by none other than former AG and staunch Najib supporter Mohamed Apandi Ali. Not a cent beyond the RM48,230 must be paid.
It’s a long haul and involves detail and planning. But if vulture funds deny financial support to Cohen, the court actions will fizzle out. And they will do that if the claim is unlikely to succeed - Malaysia has to show in no uncertain terms that the claims are destined to fail.
It is well to realise that Najib’s incompetence, indifference and perhaps distraction is the source of this current international problem that Malaysia faces - a claim of over RM60 billion, bigger than the total amount lost by 1MDB of between RM40-50 billion before opportunity costs.
How could anyone want him back anywhere? How could anyone, let alone police officers, kiss such soiled hands? Competence and integrity must never be compromised or sacrificed in the running of a nation - that is the lesson of the Sulu claim, as it is with 1MDB and a host of other issues too numerous to mention here. - Mkini
P GUNASEGARAM, a former editor at online and print news publications, and head of equity research, is an independent writer and analyst.
The views expressed here are those of the author/contributor and do not necessarily represent the views of MMKtT.
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