(Reuters) Malaysia does not have to pay around US$15 billion linked to a long-running territorial dispute in the Borneo state of Sabah after a Dutch court refused to enforce the arbitration award.
The Hague court of appeals on Tuesday said it did not recognise that there could be an arbitration award to be made as it dismissed the suit.
“The court dismisses the requests of the Filipino nationals” to demand to execute the arbitration award, the judgment said.
Last year, the Filipino heirs to the last sultan of the remote Philippine region of Sulu were awarded US$14.9 billion by a Paris arbitration court in a long-running dispute with Malaysia over a colonial-era land deal.
They have since sought to seize Malaysian government assets in France, Luxembourg and the Netherlands, in a bid to enforce the award.
Malaysia, which did not participate in the arbitration, maintains the process is illegal and has vowed to fight the seizures. It obtained a stay on the award in France but the ruling remains enforceable overseas under a UN treaty on arbitration.
The heirs in September had sought permission from a Dutch court to enforce the award in the Netherlands, Reuters reported.
The dispute was between a number of Filipino nationals and Malaysia over an agreement entered into in 1878 between the Sultan of Sulu, who the nationals claim to be heirs of, as well as two entrepreneurs from England and Austria. The then-sultanate had leased the state of Sabah to a British company at the time, but the Borneo state later came to be merged into Malaysia.
The 1878 agreement does not contain a valid arbitration clause, The Hague court said in its verdict. It also said the award can’t be rendered because the French court suspended its enforcement.
The Paris court of appeals had earlier this month ruled that the arbitration court that ordered Malaysia to make the payment did not have jurisdiction in the case.
Malaysia on Tuesday welcomed the Dutch court’s ruling with Prime Minister Anwar Ibrahim saying the decision blocked any attempts by claimants to enforce “illegitimate claims’ in the Netherlands.
“Malaysia trusts that today’s decision of The Hague Court of Appeal, combined with the recent decision of the Paris Court of Appeal, will put an end to the frivolous attempts of the Claimants to enforce the purported Final Award in other jurisdictions,” Anwar said in a statement.
Lawyer Paul Cohen, acting for the Sulu heirs, said they were disappointed with the court decision. He would not say if they would lodge an appeal against the ruling.
