Malaysia doesn’t have to pay around $15 billion linked to a long-running territorial dispute in the Borneo state of Sabah after a Dutch court refused to enforce the arbitration award.
(Bloomberg) — Malaysia doesn’t have to pay around $15 billion linked to a long-running territorial dispute in the Borneo state of Sabah after a Dutch court refused to enforce the arbitration award.
The Hague court of appeals on Tuesday said it didn’t recognize that there could be an arbitration award to be made as it dismissed the suit.
The ruling is related to a dispute between a number of Filipino nationals and Malaysia over an agreement entered into in 1878 between the Sultan of Sulu, who the nationals claim to be heirs of, as well as two entrepreneurs from England and Austria. The then-sultanate had leased the state of Sabah to a British company at the time, but the Borneo state later came to be merged into Malaysia.
The 1878 agreement does not contain a valid arbitration clause, the Hague court said in its verdict. It also said the award can’t be rendered because the French court suspended its enforcement.
The Paris court of appeals had earlier this month ruled that the arbitration court that ordered Malaysia to make the payment didn’t have jurisdiction in the case.
“Malaysia trusts that today’s decision of The Hague Court of Appeal, combined with the recent decision of the Paris Court of Appeal, will put an end to the frivolous attempts of the Claimants to enforce the purported Final Award in other jurisdictions,” Malaysia’s Prime Minister Anwar Ibrahim said in a statement.
–With assistance from Ravil Shirodkar.
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