The government has refused to be drawn into the dispute over Sabah after the lawyer of the claimant heirs of the Sulu Sultanate said the French court’s recent dismissal of the arbitral award of $14.9 billion opened the prospect of leasing the resources-rich contested territory possibly to China or the Philippines.

The Philippines is not privy to the cases between the heirs of the Sultanate of Sulu and Malaysia, according to Solicitor General Menardo Guevarra when sought for comment on the latest development in the ancient dispute.

The lead lawyer for the family of the Sulu sultanate claimed Malaysia’s recent victory in the French Supreme Court was a “spectacular own goal.”

Paul Cohen said the court’s dismissal of a challenge to an earlier decision dismissing the “final award” by Spanish arbitrator Dr. Gonzalo Stampa meant that his clients were now free to lease Sabah to other nations, including China and the Philippines.

Cohen said Stampa’s decision had, in effect, meant that the heirs would give up their “rights” to Sabah in exchange for the huge amount.

“If the Malaysians accept the French court’s ruling, they accept that the sovereignty of Sabah rests with the descendants of the Sulu Sultanate,” Cohen said.

“Every court decision in this case, including those in France, found that there was a lease agreement, rental for the use of Sabah. No one disputes that the lease depended upon payment, and that Malaysia broke the lease by failing to pay (indeed, Malaysia gleefully admitted as much),” he said.

The solution the arbitrator came up with was to terminate the lease and compensate the Sulu heirs for the loss of their territory.

“But if the French court concludes that the method of dispute resolution in the lease had lapsed, the Sulu heirs are free to terminate the lease on their own terms and to do what they will with it,” Cohen said.

He noted that Minister Datuk Seri Azalina Othman Said in the Prime Minister’s Department (Law and Institutional Reform) said Malaysia “will find it unpleasant” if the “heirs” decide to “transfer the lease to another tenant,” such as the Philippines, China or even Brunei.

“The arbitration prevented them from doing so by prescribing a specific mechanism for resolution (termination plus compensation). Without that mechanism, it’s open season on Sabah,” he said.

“The government is not privy to the cases between the heirs of the Sultanate of Sulu and Malaysia. Based on independent reports, however, it appears that the heirs have suffered setbacks in the enforcement of the arbitral award amounting to $14.9 billion in their favor,” SolGen Guevarra in a Viber message to Daily Tribune.

Earlier, Guevarra told the Tribune that they updated the Palace on the recent development in the French arbitration award over the Sabah claim.

No court jurisdiction

The Paris Court of Appeal’s judgment in June 2023 found that the arbitral tribunal that heard the petition filed by the Filipino heirs of the last Sultan of Sulu did not have jurisdiction over the case.

The Paris-based Cour de Cassation, or Supreme Court, ruled that a Spanish arbitrator lacked standing in France to order the Southeast Asian country to pay $15 billion to the claimants. The arbitrator had moved the case to France in 2021 after a Spanish court voided his appointment in Spain.

The Malaysian government was represented in France by Bredin Prat. The firm Gaillard Banifatemi Shelbaya Disputes represented the claimants.

Malaysian Minister Said described the French ruling in a Facebook post as a “historic victory.”

She said the decision meant the initial basis for the disputed final award that ordered Malaysia to pay the $15 billion was not recognized under French law.

The judgment implied that the Paris Court of Appeal will also annul the $14.9 billion award handed down earlier.

The claimants had previously tried to seize three properties owned by the Malaysian government in Paris as well as assets of the Malaysian state oil firm Petronas in Luxembourg and the Netherlands.