Sultanate lawyers expand seizure of Malaysian assets
Lawyers of the heirs of the Sultanate of Sulu are moving to seize more Malaysian assets all over the world in the enforcement of the $14.9 billion award they won in an arbitration against that country.
An official of the sultanate said their lawyers are working to seize more Malaysian assets, after their initial seizure of assets of state oil company Petronas in Luxembourg was stayed by a local court.
Malaysia was able to secure a stay order from a Luxembourg court to lift the seizure order and sultanate lawyers are expected to appeal the ruling.
The lawyers earlier filed a second action against Malaysia in the Netherlands as part of their efforts to seize more Malaysian state assets in countries that are signatories to the United Nations New York Convention.
“The sultanate is awaiting the legal action filed in the Netherlands last October,” the official said.
“This filing in the Netherlands will soon be followed by other enforcement actions of varying types in the multiple jurisdictions,” said barrister Paul Cohen, the heirs’ lead co-counsel of London-based law firm 4-5 Gray’s Inn Square.
This may include the immediate direct attachment of specific Malaysian assets in the Netherlands and elsewhere, Cohen told Reuters in an emailed statement.
The petition did not cite specific assets but Malaysian state-owned companies in the Netherlands include Petronas and palm oil producer Sime Darby.
A French arbitration court in February 2022 ordered Malaysia to pay $14.9 billion to the descendants of the last Sultan of Sulu to settle a dispute over a colonial-era land deal.
Lawyers for the sultanate said the February ruling remains legally enforceable outside France through the New York Convention, a UN treaty on international arbitration recognized in 170 countries.
Even if Malaysia was able to secure a stay order from a Paris appellate court, sultanate lawyers said the order does not cover other countries.
“The stay that seems to comfort the Malaysian government temporarily delays local enforcement in one country — France itself,” said Cohen. “It does not apply to the other 169.”
With some exceptions, such as diplomatic premises, any Malaysian government-owned asset within nations that are party to the UN Convention is eligible for the purposes of enforcing the award, said Elisabeth Mason, another lawyer for the heirs.
Malaysia and the Netherlands are both signatories to the convention on the recognition and enforcement of foreign arbitral awards, more commonly known as the New York Convention, which was adopted by the United Nations on 10 June 1958.
At least 1,700 cases have been decided by arbitration in the 170 UN member countries. No less than the US Supreme Court has ruled that the New York Convention does not conflict with domestic equitable estoppel doctrines that permit the enforcement of arbitration agreements by non-signatories.