Malaysia confident of victory in $20.1 billion legal case, says senior minister

KUALA LUMPUR – Lawyers for the Malaysian government are “confident” of winning a Dutch court case over a US$14.9 billion (S$20.1 billion) award against the South-east Asian nation that stems from a 19th century deal with a Philippine sultan, a senior minister has said.

The complex legal battle being fought in European courts is rooted in Malaysia’s colonial past, and at stake are territorial claims and potentially billions of dollars worth of state assets.

The Malaysian government has warned that the legal action being waged by the Sultan of Sulu’s descendants “threatens the sovereignty and security of the country”.

But in a Facebook post late on Thursday, Ms Azalina Othman Said, a minister in the Malaysian Prime Minister’s department, said the lawyers were confident of victory.

“Malaysian-appointed lawyers are confident that Malaysia has a good chance of winning based on the facts and evidence that is clearly on Malaysia’s side,” she wrote.

The Sultan of Sulu once ruled over the tropical islands that are part of the southern Philippines as well as Sabah in Malaysia.

Oil-rich Sabah fell under the control of European colonial powers in 1878 in an agreement that saw the sultan and his descendants receive annual payments – the equivalent of around US$1,100 – that independent Malaysia continued to make after it was formed in 1963.

Kuala Lumpur stopped the payments in 2013 after a bloody incursion from the Sulu archipelago into Sabah, where the Philippines’ has a long-dormant territorial claim.

Eight heirs of the sultan have been pursuing a claim for compensation following the cessation of payments.

A French arbitration court in 2022 awarded US$14.9 billion against Malaysia, but a judge later issued a stay on the enforcement of the ruling while Kuala Lumpur appealed.

Lawyers for the Sultan’s descendants have since petitioned The Hague Court of Appeal to allow the Paris decision to be enforced in the Netherlands, arguing the award was international and the suspension applied only to France.

A decision is expected in the case next Tuesday.

Datuk Seri Azalina said the Malaysian government “remains committed to continuing efforts to ensure Malaysia’s sovereignty is preserved in this case”.

A spokesman for the claimants said on Friday that if the court agrees with the heirs’ petition, it could pave the way for the freezing of Malaysian state assets in the Netherlands worth billions of dollars.

He added that there were more than 160 countries where such a petition could be filed. AFP