THE Dutch courts’ decision to reject a bid by eight descendants of the Sulu Sultanate to enforce a US$14.9 bil (RM69.5 bil) arbitration verdict against Malaysia would almost certainly have an impact on other regions of the world.
Law and Institutional Reform Minister Datuk Seri Azalina Othman Said stated in a statement that the Dutch Court of Appeals ruling affirms Malaysia’s stance that the sham arbitration award should never have occurred and that the final arbitration award was null and void.
“The claimants cannot rely on the purported final award in attempting to seize Malaysian assets in the Netherlands. Today’s landmark judgement will likely render futile any further illegitimate attempts by the claimants and their funders to enforce it in other jurisdictions,” said Azalina.
After Malaysia discontinued an annual payment of RM5,300 to the Sultanate of Sulu in 2013, the claimants sought arbitration in Spain. Malaysia refused to participate in the arbitration procedure since it was illegal.
The Spanish courts appointed arbitrator Gonzalo Stampa to hear the matter and decided in favour of the claimants.
However, Stampa’s appointment as an arbitrator in the case was revoked by the Madrid High Court of Justice in June 2021.
Since last year, the claimants have been attempting to enforce the final award in France, Luxembourg and the Netherlands by seizing Malaysian assets.
Aside from the Dutch courts, the French courts have similarly rejected the claimants’ bid to have the final award enforced in France.
Moreover, Azalina pointed out that the Dutch court recognised Stampa’s annulment as an arbitrator and thus invalidated all of his procedural acts.
According to her, no arbitral award exists that would be capable of recognition and enforcement.
“The exceptional stay of enforcement of the purported final award in Paris is a further ground for refusal which renders the sham award incapable of recognition and enforcement in the Netherlands.” – June 28, 2023
