Vol 2 No 25 | July 2022

Your Editor, Jamari Mohtar, is amazed and perplexed that the opposition could not see the issue on claims over Petronas assets by the purported heirs of the Sulu sultanate is in the national interest, and to debate it in parliament will only give advantages to the other side in term of knowing first hand what the Malaysian government intends to do in its legal battle against the absurd claims, and hence the Speaker disallowed calls for the issue to be debated.

  • Parliamentary Speaker Azhar Azizan Harun has chided MPs who want to debate claims over Petronas assets by the purported heirs of the Sulu sultanate.

  • In expanding his sub judice ruling, Azhar said debating the matter could reveal the government’s legal strategies to the enemy.

  • “Do we want as we are debating this, I don’t know what will be said, the government’s strategy revealed, and there are criticisms of it?

  • “Then the other side can learn (our strategy). Would that not hurt the government’s interest in its litigation proceedings? Do we want to show our strategy to the world?

  • “The first rule of litigation is the element of surprise, the first rule of war is the same,” he said in parliament on June 20.

  • Hence, the Speaker said it was his responsibility to ensure that the government’s strategies were not exposed.

  • The purported heirs of the last Sulu sultan, Sultan Jamalul Kiram II, are using international legal processes in a bid to claim US$14.92 billion (RM66.38 billion) in overdue cession payments for Sabah.

  • The arbitration process was initiated in response to Malaysia cutting off the annual cession payments of RM5,300 to the Sulu sultanate in 2013.

  • Following the award, the Sulu side, via their lawyers, managed to seize two Luxembourg-incorporated subsidiaries of Petronas worth US$2 billion (RM8.9 billion).

  • Malaysia is challenging the Sulu claim in courts in Spain and France, which Azhar argues makes any debate on the matter run afoul of Parliament standing orders on sub judice.

  • Former premier Najib Razak is being blamed for cutting off the annual cession payments in 2013, and in line with the call by the newly minted Keadilan (PKR) deputy president, Rafizi Ramli that PKR members must lodge police reports every time Najib tells “lies”, over 100 PKR divisions had lodged police reports against Najib on July 19 over his decision to terminate annual payment to the heirs of the Sulu sultanate in 2013.

  • But where is the lie and where is the truth when what Najib did was just cutting off the annual payments? It is indeed very strange for PKR to describe this action as constituting lies.

  • At most, it should be seen as just whether Najib’s action then was right or wrong, nothing to do with lies.

  • And why the need to overwhelm the police, whose main duty is to keep law and order, with over 100 reports of the same thing?

  • Your Editor has initially thought that after some years of living in the political wilderness, Rafizi’s comeback in politics will add some dynamism to PKR and the nation’s political scene.

  • But sad to say this will not be the case, as he can’t even tell the difference between a lie, and an action that could be right or wrong.

  • And so, politics in Malaysia will be the same old, same old of scoring points in order to win power, and the same power hungry politicians will again be at the forefront of politics for some years to come.

  • As it is, things are favourable on the Malaysian side. Firstly, on July 12, Malaysia had obtained a stay order against the enforcement of a French arbitration court ruling ordering the government to pay US$14.9 billion to the descendants of a late sultan over a colonial-era land deal.

  • The Paris Court of Appeal allowed an application by the Malaysian government for the stay after finding enforcement of the award could infringe the country’s sovereignty, Malaysia’s law minister Wan Junaidi Tuanku Jaafar said in a statement.

  • Secondly, Petronas has clarified through a statement although its two subsidiaries – PETRONAS Azerbaijan (Shah Deniz) S.à r.l. and PETRONAS South Caucasus S.à r.l. – had been served with ‘Saisie-arret’ on July 11, both subsidiaries have previously divested their entire assets in the Republic of Azerbaijan and the proceeds from the exercise have been duly repatriated.  

  • ‘Saisie-arret’ is a French term which generally means an act of seizure based on the number of judgments or arbitral awards obtained.

  • Petronas views the actions taken against it as baseless and is working vigorously to defend its legal position on this matter.

  • Hence, while the final conclusion of this saga will be played out at the courtroom in Paris, for Malaysians including MPs it is enough for them to know the basic outline of the saga as provided by the government. 

  • Revealing more through parliamentary debate will only hurt the national interest, as the other party will duly listen, and take appropriate actions.

  • Based on news reports then, for Malaysia it all began on Feb 11, 2013 when Malaysians were rocked by news that broke late into the night about the eastern shores of Sabah being invaded by a group of armed men.

  • The group, over a hundred people, was quickly identified to be followers of self-proclaimed Sultan of Sulu, Jamalul Kiram III. They were led by Jamalul’s brother Agbimuddin Kiram.

  • Hailing from Pulau Simunul of Tawi-Tawi in the southern Philippines, the group first entered Malaysian waters by boat on Feb 9 and gathered in stages at Felda Sahabat 17 in Kampung Tanduo, Lahad Datu, as a means of ‘reclaiming’ part of Borneo as their ancestral land.

  • This forced some eighty locals to flee from 15 homes. Upon being discovered by fishermen, the Filipino rebels broke into smaller groups and entered several locations in the village, including Kampung Sungai Bakau.

  • On Feb 14, Prime Minister Datuk Seri Najib Razak said the Malaysian government would negotiate with the group before ousting them from the area.

  • Then Inspector General of Police Tan Sri Ismail Omar said negotiations with the group were in progress to find the best solution without bloodshed.

  • The tussle between Malaysia and the Philippines over Sabah had been a long-standing one. The Suluks wanted Sabah to be returned to them, claiming it was seized by the British from their government.

  • But Malaysia had always rejected the Philippine’s territorial claim to Sabah as it deemed Sabah residents had exercised their right to self-determination when they voted to join the Malaysian federation in 1963.

  • The Sulu sultanate also lost their rights in the Madrid protocol of 1885 when their predecessors Spain relinquished all their claims to Sabah, giving all control to Malaysia’s predecessors, the British.

  • However, it was subsequently learnt the Malaysian Embassy in the Philippines were issuing cheques for RM5,300 to the legal counsel of the heirs of the Sultan of Sulu in keeping with the terms of an 1887 agreement.

  • While Malaysia considered it as annual cession payment for the disputed state, the sultan’s descendants considered it as “rent”.

  • The first shootout between Malaysian security forces and the small group of Filipino rebels broke out on March 1 when the latter tried to break a police blockade in Kampung Tanduo.

  • Najib confirmed the event had left two police commandos dead while Sabah police commissioner, Datuk Hamza Taib, confirmed that 12 of Kiram’s followers were killed.

  • At this juncture, the Philippines government seemed to totally leave the fate of the royal Sulu army in the hands of the Malaysian security forces.

  • In the early hours of March 3, 2013 a group of Filipino gunmen, believed to be less than 10, ambushed the police in a village in Semporna, Sabah.

  • The media reported six Malaysian police officers and seven assailants were killed. It was also reported that four of the policemen had their bodies mutilated, with one beheaded.

  • On March 5, three F-18 and five Hawk aircraft filled the Kampung Tanduo skies in an airstrike against the Filipino rebels at dawn in an effort to flush them out.

  • Thirteen of the Sulu gunmen were killed in the process. Codenamed Ops Daulat, the ‘mopping up’ stage also saw ground troops going door-to-door to sniff out the intruders. However, none were caught.

  • Kampung Tanduo was finally secured by Malaysian forces on March 11, with the bodies of 22 Sulu gunmen recovered. Despite the deaths, the Kiram family insisted its army stay put in Sabah and not surrender.

  • Between March 20 and April 1, 15 Filipino nationals were charged in court over the incursion – eight of them in the Tawau High Court while the rest in the Lahad Datu Magistrate’s Court.

  • Ops Daulat ended on June 29 when it was replaced by the Eastern Sabah Security Command (ESSCOM). The body is now responsible for security arrangements in the area, covering all operations from northern Kudat to south-eastern Tawau.

  • This is to ensure that Sabah’s eastern sea borders remain safe. A 24-hour ESSCOM operations room was also announced on Aug 12.

  • The Lahad Datu standoff reportedly saw a total of 71 deaths – 56 from the Sulu sultanate, nine from the Malaysian authorities and six civilians.

  • Not only the Malaysian media had identified the assailants as followers of self-proclaimed Sultan of Sulu, global media reports then including the Philippines media had also identified them as followers of the Sultan of Sulu.

  • The Philippines Star in its February 23, 2013 report was very explicit in quoting the spokesman for Sultan of Sulu Jamalul Kiram III that the Sultanate of Sulu wants Malaysia to return Sabah to the control of the Philippines.

  • The spokesman Abraham Idjirani issued the statement as he stressed the almost 200 members of the Royal Army loyal to Kiram III will remain holed up in Lahad Datu in Sabah for as long as it would take to resolve a standoff that has lasted for almost a week then.

  • Even the then Philippines Defense Secretary Voltaire Gazmin said while the heirs of the Sultanate of Sulu may have basis for reclaiming Sabah as their ancestral land, the process they are pursuing right now is wrong.

  • Then Foreign Affairs Secretary Albert del Rosario also said the Philippines has requested Malaysia to extend the deadline for the followers of the Kiram family to leave Lahad Datu (see Sultanate of Sulu wants Sabah returned to Philippines )

  • Thus, it is quite mind boggling for Malaysian former Attorney General, Tommy Thomas to say there appeared to be no evidence linking the Sulu descendants who were receiving the annual fees from Malaysia to the intruders of Lahad Datu in 2013, and hence according to him there are no legal grounds for Malaysia to stop the annual payment and doing so resulted in a breach of the 1878 agreement.

  • In fact Thomas is doing a disservice to the country when a MalaysiaNow report on July 20 said his letter dated Sept 19, 2019, which expressed regret the Malaysian government had stopped an annual payment made to the descendants of the Sulu sultanate, which once ruled parts of the Malay archipelago including present-day Sabah, appears to be the backbone of an arbitration decision that now threatens the forfeiture of billions in Malaysian assets abroad.

  • After expressing regret, Thomas in his letter listed the outstanding payments including 10% interest, before arriving at the grand total of RM48,230, a sum he offered to wire “immediately” to the claimants in exchange for an end to any arbitration. 

  • “Malaysia is now ready and willing to pay your clients all arrears from 2013 to 2019,” he wrote, adding that the offer should be reciprocated with the claimants ceasing the arbitration move.

  • According to the news portal, a study of the 297-point arbitration decision shows at least a dozen mentions or citations from Thomas’ letter, as Spanish arbitrator Gonzalo Stampa sought to justify the unusual hefty award to the claimants.

  • The arbitration process ended with Malaysia being told to pay the group US$14.9 billion (RM60 billion) – the world’s second biggest award of the kind that eclipses the massive losses suffered by Malaysia in the 1MDB scandal. 

  • In putting forward their case in the arbitration proceedings, the Sulu claimants several times seized upon the concession offered by Thomas, on which Stampa had relied in justifying the multi-billion dollar award.

  • Stampa said Malaysia had breached the 1878 agreement when it ceased the RM5,300 annual payments in 2013.

  • “Mr Thomas took the same position in his correspondence of Sept 19, 2019… when he offered to settle the matter by resuming payments, provided that claimants discontinued the arbitration.

  • “Clearly (and correctly), Malaysia’s attorney-general never perceived this arbitration as in any respect an assault on Malaysia’s sovereign prerogatives,” added Stampa

  • Later, Stampa repeated Thomas’ words again.

  • “Respondent [Malaysia] also admitted that those payments were stopped in 2013 and have not been paid to claimants since. On Sept 19, 2019, Malaysia stated that it ‘… is now ready and willing to pay your clients all arrears from 2013 to 2019 and agrees to fully comply with the 1878 Grant and the 1903 Confirmation of Cession from henceforth with regards to future payments. As to the arrears, Malaysia is also agreeable to paying simple interest of 10% p.a. on the annual payments for each of the years concerned’…”

  • Stampa then crucially relied on another statement by Thomas in concluding that the Sulu sultan had never divested himself of sovereignty over the territories of North Borneo.

  • He said Malaysia had agreed that the “assessment of the evidence available at the present arbitration sustains that the sultan was never deprived or divested of sovereignty over the territories of North Borneo, mentioned in both the 1878 Agreement and the 1903 Confirmatory Deed”.

  • The Confirmatory Deed was signed by Sulu Sultan Jamalul Kiram II, confirming that he had ceded ownership of North Borneo to the British colonial power.

  • Stampa also relied on the fact that no reservation was made by Thomas that the arbitration proceedings would breach Malaysia’s sovereign immunity.

  • The transcribed terms reveal the absence of any reservation made at that time (i.e., Sept 19, 2019), once the present arbitration was set in motion, that these proceedings would breach its sovereign immunity.

  • Another blow to Malaysia’s case was the wording of Thomas’ letter, which led to the conclusion that it was a commercial transaction and subject to arbitration. 

  • The genesis of the Sulu claims on Sabah was vested in historical fact when in 1878 the Sultan of Sulu decided to grant and cede what is now Sabah to a British company.

  • The bone of contention in the 1878 agreement is the Malay word, “pajakkan” used in the agreement. While Spanish linguists in 1878 and American anthropologists Otley Beyer and Harold Conklin in 1946 translated pajakkan as “arrendamiento” or “to lease”, the British used the interpretation of historian Najeeb Mitry Saleeby in 1908, and William George Maxwell and William Summer Gibson in 1924, which translated pajakkan as “to grant and cede”.

  • But all these ambiguities with regards to the meaning of “pajakkan” were settled when in 1903, SultanJamalul Kiram II, signed a document known as the “Confirmation of cession of certain islands”, under which he grant and ceded additional islands, in addition to the land agreed upon in 1878, in the vicinity of the mainland of North Borneo from Banggi Island to Sibuku Bay to the British North Borneo Company.

  • In the 1903 agreement, the ambiguous term pajakkan was no longer used, but instead the phrase “kita telah keredai menyerahkan kepada pemerintah British North Borneo”, which literally means “we have willingly surrendered to the Government of British North Borneo”, was used in the agreement, asserting the understanding of the Sulu Sultanate of that time of the meaning of the earlier agreement in 1878.

While EU is gaslighting environmentalists by redefining “green” energy, Asean is making historic move by introducing multilateral cross-border electricity trade

  • While the European Union (EU) countries are reverting to ‘dirty fuel’ because of the ballooning price of energy brought about by their own doing of sanctioning Russian gas and oil, forcing them to make a bitter decision to restart coal power plants in view of the shortage of cheap and abundant Russian gas, Singapore is moving leap and bound by importing renewable energy (RE) from Laos through Thailand and Malaysia.

  • This historic move marks the first multilateral cross-border electricity trade to consist of four Asean countries and in another first, this is the original, ground-breaking project to import RE into Singapore.

  • The amount of imported energy estimated at up to 100 megawatts (MW) of hydropower will be shipped from Laos to Singapore, using existing interconnectors in the four countries, under the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP).

  • As part of the LTMS-PIP, Keppel Electric Pte Ltd (Keppel Electric), a subsidiary of Keppel Infrastructure Holdings Pte Ltd (KI), and Electricite du Laos (EdL) have signed an initial two-year power purchase agreement following the announcement of the signing of an exclusive framework agreement in September 2021. Keppel Electric is also the first entity to be issued an electricity importer licence by the Singapore Energy Market Authority (EMA).

  • The LTMS-PIP demonstrates the feasibility of multilateral power collaboration as technical, commercial, legal and regulatory arrangements were finalised with the extensive collaboration among the various parties, including Keppel Electric and EdL, Electricity Generating Authority of Thailand (EGAT) and Tenaga Nasional Berhad (TNB), with the support from the governments of the four member Asean countries. Keppel Electric and EdL will continue to work closely with EGAT and TNB for the successful implementation of the power supply.

  • Additionally, the project will act as a case study to identify any importing challenges while also building the technical and regulatory frameworks for importing electricity into Singapore, which will ultimately enable more internationally partnered RE import projects.

  • The 100MW account for about 1.5% of Singapore’s peak electricity demand in 2020 and could power around 144,000 four-room Housing Board flats for a year.

  • In a joint statement on June 23 from the EMA and the Ministry of Energy and Mines of Laos, Electricite du Laos, and Keppel, the organisations confirmed the landmark power integration project is meant to progress the expansion of a wider Asean power grid.

  • “The Asean power grid is a key regional initiative to enhance interconnectivity, energy security and sustainability through existing electricity interconnections.

  • This provides opportunities to tap on low- carbon and RE sources in the region and contributes towards economic development and improving energy security and stability,” the statement said.

  • Laotian Minister for Energy and Mines Daovong Phonekeo said that Laos sees itself as a major supporter of RE in the region with its vast RE potential.

  • “Lao PDR has exported over 6,000MW cross-border electricity to neighbouring countries including Cambodia, Myanmar, Thailand and Vietnam.

  • “The country has more than 8,000MW of installed hydropower capacity, which is set to grow in the near future to support its domestic demand and future exports.

  • “We continually support the Asean Economic Community, Greater Mekong Subregion, and Asean Power Grid implementation and this project proves that we are on the right track as we promote the development of clean energy resources including solar and wind power.

  • “Again, we would like to express our gratitude to the Government of Thailand, Government of Malaysia and the Government of Singapore for your support to implement this project,” he added

  • For Singapore and in an attempt to meet net-zero targets by 2050, the country will need to depend less on natural gas, of which currently over 95% of Singapore’s electricity is generated by fossil fuel.

  • The Laos project marks a departure from the use of fossil fuels and signals a large burst of RE into the energy mix is to follow.

  • “The commencement of electricity imports from Laos marks a significant milestone in our regional energy cooperation… Interconnected power grids can accelerate the deployment of RE, promote supply diversification, and strengthen grid stability for the region as a whole,” commented Ngiam Shih Chun, the EMA Chief Executive.

  • In addition, Keppel and EdL are also collaborating on the establishment of RE tracking, verification and assurance through RE Certificates (RECs) as well as other long-term renewable electricity supply, in support for the Singapore Green Plan 2030 as well as to meet the growing demand for RE and energy transition for the Asean region.

Parliamentary Speaker Azhar Azizan Harun has chided MPs who want to debate claims over Petronas assets by the purported heirs of the Sulu sultanate, as this could reveal the government’s legal strategies to the enemy.

“Do we want as we are debating this, I don’t know what will be said, the government’s strategy revealed, and there are criticisms of it? Then the other side can learn (our strategy). Would that not hurt the government’s interest in its litigation proceedings?

Do we want to show our strategy to the world? The first rule of litigation is the element of surprise, the first rule of war is the same,” he said in parliament on June 20.

Hence, the Speaker said it was his responsibility to ensure that the government’s strategies were not exposed.

The purported heirs of the last Sulu sultan, Sultan Jamalul Kiram II, are using international legal processes in a bid to claim US$14.92 billion (RM66.38 billion) in overdue lease payments for Sabah.

The arbitration process was initiated in response to Malaysia cutting off the annual cession payments of RM5,300 to the Sulu sultanate in 2013. The Sulu side, after being awarded the claim went on via their lawyers, to seize two Luxembourg-incorporated subsidiaries of Petronas worth US$2 billion (RM8.9 billion).

Malaysia is challenging the Sulu claim in courts in Spain and France, which Azhar argues makes any debate on the matter run afoul of Parliament standing orders on sub judice.

Former premier Najib Razak is being blamed for cutting off the annual cession payments in 2013, and in line with the call by the newly minted Keadilan (PKR) deputy president, Rafizi Ramli that PKR members must lodge police reports every time Najib tells “lies”, over 100 PKR divisions had lodged police reports against Najib on July 19.

But where is the lie and where is the truth when what Najib did was just cutting off the annual cession payments? It is indeed very strange for PKR to describe this action as constituting lies.

At most, it should be seen as just whether Najib’s action then was right or wrong, nothing to do with lies.

And why the need to overwhelm the police, whose main duty is to keep law and order, with over 100 reports of the same thing?

One would have thought after some years of living in the political wilderness, Rafizi’s comeback in politics would add some dynamism to PKR and the nation’s political scene.

But sad to say that this will not be the case, as he can’t even tell the difference between a lie, and an action that could be right or wrong.

And so, politics in Malaysia will be the same old, same old of scoring points in order to win power, and the same power hungry politicians will again be at the forefront of politics for some years to come.

As it is, things are favourable on the Malaysian side. Firstly, the Paris Court of Appeal allowed an application by the Malaysian government for a stay order after finding enforcement of the award could infringe the country’s sovereignty.

Secondly, Petronas has clarified although its two subsidiaries – PETRONAS Azerbaijan (Shah Deniz) S.à r.l. and PETRONAS South Caucasus S.à r.l. – had been served with ‘Saisie-arret’ on July 11, both subsidiaries have previously divested their entire assets in the Republic of Azerbaijan and the proceeds from the exercise have been duly repatriated.  

‘Saisie-arret’ is a French term which generally means an act of seizure based on the number of judgments or arbitral awards obtained. Petronas views the actions taken against it as baseless and is working vigorously to defend its legal position on this matter.

Hence, while the final conclusion of this saga will be played out at the courtroom in Paris, for Malaysians including MPs it is enough for them to know the basic outline of the saga as provided by the government.

Revealing more through parliamentary debate will only hurt the national interest, as the other party will duly listen, and take appropriate actions.

Based on news reports then, for Malaysia it all began on Feb 11, 2013 when Malaysians were rocked by news that broke late into the night about the eastern shores of Sabah being invaded by a group of armed men.

The group, over a hundred people, was quickly identified to be followers of self-proclaimed Sultan of Sulu, Jamalul Kiram III. They were led by Jamalul’s brother Agbimuddin Kiram.

The tussle between Malaysia and the Philippines over Sabah had been a long-standing one. The Suluks wanted Sabah to be returned to them, claiming it was seized by the British from their government.

But Malaysia had always rejected the Philippine’s territorial claim to Sabah as it deemed Sabah residents had exercised their right to self-determination when they voted to join the Malaysian federation in 1963.

The Sulu sultanate also lost their rights in the Madrid protocol of 1885 when their predecessors Spain relinquished all their claims to Sabah, giving all control to Malaysia’s predecessors, the British.

However, it was subsequently learnt the Malaysian Embassy in the Philippines were issuing cheques for RM5,300 to the legal counsel of the heirs of the Sultan of Sulu in keeping with the terms of an 1887 agreement.

While Malaysia considered it as annual cession payment for the disputed state, the sultan’s descendants considered it as “rent”.

In the 2013 incident, the Philippines government seemed to totally leave the fate of the royal Sulu army in the hands of the Malaysian security forces.

In the early hours of March 3, 2013 a group of Filipino gunmen, believed to be less than 10, ambushed the police in a village in Semporna, Sabah. The media reported six Malaysian police officers and seven assailants were killed. It was also reported that four of the policemen had their bodies mutilated, with one beheaded.

On March 5, three F-18 and five Hawk aircraft filled the Kampung Tanduo skies in an airstrike against the Filipino rebels at dawn in an effort to flush them out. Thirteen of the Sulu gunmen were killed in the process. Codenamed Ops Daulat, the ‘mopping up’ stage also saw ground troops going door-to-door to sniff out the intruders. However, none were caught.

Kampung Tanduo was finally secured by Malaysian forces on March 11, with the bodies of 22 Sulu gunmen recovered. Despite the deaths, the Kiram family insisted its army stay put in Sabah and not surrender.

The Lahad Datu standoff reportedly saw a total of 71 deaths – 56 from the Sulu sultanate, nine from the Malaysian authorities and six civilians.

Not only the Malaysian media had identified the assailants as followers of self-proclaimed Sultan of Sulu, global media reports then including the Philippines media had identified them as followers of the Sultan of Sulu.

The Philippines Star in its February 23, 2013 report was very explicit in quoting the spokesman for Sultan of Sulu Jamalul Kiram III that the Sultanate of Sulu wants Malaysia to return Sabah to the control of the Philippines.

The spokesman Abraham Idjirani issued the statement as he stressed the almost 200 members of the Royal Army loyal to Kiram III will remain holed up in Lahad Datu in Sabah for as long as it would take to resolve a standoff that has lasted for almost a week then.

Even the then Philippines Defense Secretary Voltaire Gazmin said while the heirs of the Sultanate of Sulu may have basis for reclaiming Sabah as their ancestral land, the process they are pursuing right now is wrong.

Then Foreign Affairs Secretary Albert del Rosario also said the Philippines has requested Malaysia to extend the deadline for the followers of the Kiram family to leave Lahad Datu (see Sultanate of Sulu wants Sabah returned to Philippines )

Thus, it is quite mind boggling for Malaysian former Attorney General, Tommy Thomas to say there appeared to be no evidence linking the Sulu descendants who were receiving the annual fees from Malaysia to the intruders of Lahad Datu in 2013, and hence according to him there are no legal grounds for Malaysia to stop the annual payment and doing so resulted in a breach of the 1878 agreement.

In fact Thomas is doing a disservice to the country when a MalaysiaNow report on July 20 said his letter dated Sept 19, 2019, which expressed regret the Malaysian government had stopped an annual payment made to the descendants of the Sulu sultanate, which once ruled parts of the Malay archipelago including present-day Sabah, appears to be the backbone of an arbitration decision that now threatens the forfeiture of billions in Malaysian assets abroad.

After expressing regret, Thomas in his letter listed the outstanding payments including 10% interest, before arriving at the grand total of RM48,230, a sum he offered to wire “immediately” to the claimants in exchange for an end to any arbitration. 

“Malaysia is now ready and willing to pay your clients all arrears from 2013 to 2019,” he wrote, adding that the offer should be reciprocated with the claimants ceasing the arbitration move.

According to the news portal, a study of the 297-point arbitration decision shows at least a dozen mentions or citations from Thomas’ letter, as Spanish arbitrator Gonzalo Stampa sought to justify the unusual award to the claimants.

The arbitration process ended with Malaysia being told to pay the group US$14.9 billion (RM60 billion) – the world’s second biggest award of the kind that eclipses the massive losses suffered by Malaysia in the 1MDB scandal. 

In putting forward their case in the arbitration proceedings, the Sulu claimants several times seized upon the concession offered by Thomas, on which Stampa had relied in justifying the multi-billion dollar award.

Stampa said Malaysia had breached the 1878 agreement when it ceased the RM5,300 annual payments in 2013. “Clearly (and correctly), Malaysia’s attorney-general never perceived this arbitration as in any respect an assault on Malaysia’s sovereign prerogatives,” Stampa added.

He then crucially relied on another statement by Thomas in concluding the Sulu sultan had never divested himself of sovereignty over the territories of North Borneo.

Stampa then went on to say Malaysia had agreed the “assessment of the evidence available at the present arbitration sustains that the sultan was never deprived or divested of sovereignty over the territories of North Borneo, mentioned in both the 1878 Agreement and the 1903 Confirmatory Deed”.

He also relied on the fact that no reservation was made by Thomas that the arbitration proceedings would breach Malaysia’s sovereign immunity.

Another blow to Malaysia’s case was the wording of Thomas’ letter, which led to the conclusion that it was a commercial transaction and subject to arbitration. 

The genesis of the Sulu claims on Sabah was vested in historical fact when in 1878 the Sultan of Sulu decided to grant and cede what is now Sabah to a British company.

The bone of contention in the 1878 agreement is the Malay word, “pajakkan” used in the agreement. While Spanish linguists in 1878 and American anthropologists H. Otley Beyer and Harold Conklin in 1946 translated pajakkan as “arrendamiento” or “to lease”, the British used the interpretation of historian Najeeb Mitry Saleeby in 1908, and William George Maxwell and William Summer Gibson in 1924, which translated pajakkan as “to grant and cede”.

But all these ambiguities were settled when in 1903, Sultan Jamalul Kiram II, signed a document known as the “Confirmation of cession of certain islands”, under which he grant and ceded additional islands, in addition to the land agreed upon in 1878, in the vicinity of the mainland of North Borneo from Banggi Island to Sibuku Bay to the British North Borneo Company.

In the 1903 agreement, the ambiguous term pajakkan was no longer used. Instead, the phrase “kita telah keredai menyerahkan kepada pemerintah British North Borneo”, which literally means “we have willingly surrendered to the Government of British North Borneo”, was used in the agreement, asserting the understanding of the Sulu Sultanate of that time of the meaning of the earlier agreement in 1878.

The confirmatory deed of 1903 makes it known and understood between the two parties that the islands mentioned were included in the cession of the districts and islands mentioned in the 1878 agreement. The originally agreed 5,000 dollars increased to 5,300 dollars per year payable annually.

Thus it is very important to understand the historical perspective of an international agreement, as one will only ignore history at one’s own peril.

Regards,

Jamari Mohtar

Editor, Let’s Talk!

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