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Why the Heirs of the Last Sulu Sultan Want to Seize $15-Billion Worth of Malaysian Assets

A complicated history between Britain, Malaysia, and the Philippines.
IMAGE WIKIMEDIA COMMONS
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The colonial legacy of Britain is chaotic, to say the least. Even today, disputes on reparations, looted artifacts, and unsettled debt still persist. In the case of the heirs of the last Sultan of Sulu Jamalul Kiram II, the family and their lawyers are looking to seize $14.9-billion worth of Malaysian assets worldwide.

To settle a colonial-era land agreement, a French arbitration court ordered Malaysia to pay the descendants back in February 2022. The plaintiff, through their lawyers, claimed that the ruling is legally enforceable outside France through the New York Convention, which is a United Nations treaty on international arbitration that has been recognized by 170 countries.

In a report by Reuters last Wednesday, July 13, however, the former British colony said that the enforcement of the award would infringe on Malaysia's sovereignty. It obtained a stay order against it. Law minister Wan Junaidi Tuanku Jaafar had also expressed that the government would prevent the award from being enforced. Coincidentally, a Paris Court Judge suspended the enforcement of the award until the appeal was settled.

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“The ‘stay’ that seems to comfort the Malaysian government temporarily delays local enforcement in one country, France itself,” stated the heirs’ lead co-counsel, Paul Cohen, of London-based law firm 4-5 Gray’s Inn Square, back in March. “It does not apply to the other 169.”

Some assets the claimants hope to seize include two Luxembourg-based subsidiaries of Malaysian state oil firm Petroliam Nasional Berhad. These are Petronas Azerbaijan (Shah Deniz) and Petronas South Caucasus.

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This only adds to a long and complicated history between the Sultan's heirs, Britain, Malaysia, and the Philippines.

The Complicated History Behind the Controversy

Sultan Jamalul Kiram II with U.S. President William Howard Taft in 1901.

Photo by Wikimedia Commons.

In January 1878, Sultan Mahomet Jamal Al Alam of Sulu entered into an agreement with businessmen Gustavus Baron de Overbeck and Alfred Dent to lease and deliver the territory known as British North Borneo for an annual rental fee of $5,000.

This included the oil-rich Malaysian state of Sabah, which is located on the northern side of Borneo. The deal was described by The Washington Post at the time as the "most important transfer obtained by a commercial company since the days of the British East India Company."

Overbeck arrived in the country in November 1877 on an expedition to Borneo to acquire territorial rights and mineral resources. Sultan Jamalulazam of Sulu would bestow the titles of Dato Bendahara and Raja Sandakan upon him. Meanwhile, Dent was the founder of the North Borneo Provisional Association Ltd. He would be a leading figure in the establishment of British presence in the territory.

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In April 1903, the British North Borneo Company entered into another agreement with Sultan Jamalul Kiram II of Sulu, the last formally recognized Sultan of Sulu, to have lands in north and northeast Borneo covered in the original lease.

This new treaty would add another $300 to the British North Borneo Company's annual tab. With support from the British Government, Overbeck, Dent, and their successors would pay a yearly total of $5,300 for the territory until 1936.

During that same year, Sultan Jamalul Kiram II passed away without any heirs. This was when the controversy of who was the present heirs of the Sultan of Sulu started. Payments ceased until North Borneo High Court Chief Justice Charles F. Macaskie named nine court-appointed heirs in 1939.

In 1946, the British Government annexed the leased territory, which would deprive the heirs of the Sultanate of any claims to the land. Malaysia would take over the arrangement after gaining its independence from Britain, paying the sum to the descendants, who were now Philippine citizens. 

About 200 armed Filipino followers of a self-proclaimed heir, Jamalul Kiram III, arrived in Sabah back in 2013 to spearhead an invasion of the area. Former President Benigno "Noynoy" Aquino III had even urged the supposed Sultan of Sulu and his followers to go back to the Philippines in a nationally televised address. During the encounter with Malaysian state forces, roughly 60 people were reported dead before the group retreated.

Then-Malaysian Attorney-General Tan Sri Abdul Gani Patail later noted that there were no ties between the invaders and the actual heirs who had been receiving the payments. Malaysia had ruled that Sabah was solely theirs and that they would put a stop to the payments.

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In 2017, the Sultan's descendants made their intentions to pursue legal action known.

Other Notes

The Sulu Provincial Capitol Building in Jolo, Sulu. Inspired by Moorish architectural design, it is one of the great traditional Islamic landmarks in the Philippines.

Photo by Wikimedia Commons.

The Center for Strategic and International Studies also reported:

"According to tradition, the Sultanate of Brunei ceded much of northern Borneo to the then-independent Sultanate of Sulu in the late 17th century in exchange for aid given during a civil war in Brunei. Sulu’s influence waxed and waned in the area until it was conquered by Spain in 1851. Given the overlapping claims of Brunei and Sulu to northern Borneo, the British North Borneo Company signed agreements with both sultanates in 1877 and 1878, ceding responsibility for the area to the company.

Unfortunately, the translations of the agreement of the Sultanate of Sulu did not match perfectly. The English version clearly states that the sultanate was ceding the territory to the British North Borneo Company in exchange for an annual payment of 5,300 Mexican pesos. However, the version in Tausug, the language of Sulu, uses a word whose meaning is closer to lease. The arrangement was inherited by post-independence Malaysia, which has continued to send annual payments to the descendants of the Sultan of Sulu, insisting that they are indeed payments rather than rent."

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The Philippine government has long asserted that the British North Borneo Company’s agreement with Sulu should have been deferred to the Philippines, where Sulu is. Its legality is disputed to this day.

Sources:

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Bryle B. Suralta
Assistant Section Editor
Bryle B. Suralta is the assistant section editor of Esquire Philippines.
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