Malaysia wins $14.9bn sultan case in Dutch courts

Malaysia on Tuesday won a Dutch court case over a $14.9 billion award against the Southeast Asian nation that stems from a 19th century deal with a Philippine sultan.

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

Descendants of the Sultan of Sulu, who once ruled over the tropical islands that are part of the southern Philippines as well as Sabah in Malaysia, had taken the case to the Hague Appeals Court.

They were asking Dutch judges to enforce a decision by a French court last year which ordered the $14.9 billion payout.

“The Hague Appeals Court today rejected the request of the Philippine nationals for the recognition and enforcement of the final arbitral award in the Netherlands,” the Dutch court said in a statement.

Malaysia’s Prime Minister Anwar Ibrahim welcomed the “landmark” decision.

“This decision has blocked any attempt by the claimants to enforce their illegitimate claims against the government of Malaysia in the Netherlands,” the prime minister said in a statement.

“We are now closer than ever to completely nullifying the sham and abusive final award” by the French court, he added.

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 $1,100 — that 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 last year awarded $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 had 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 only applied to France.

But the Dutch judges disagreed, saying the “arbitral award cannot be rendered” including because of the French court’s stay issued in the light of the Malaysian appeal.