ASEAN leaders sitting together at the March 2024 ASEAN-Australia Special Summit held in Melbourne.

Image Source: Jaimi Joy; Reuters.

A Shared History

Before colonial borders reshaped Southeast Asia, the region flourished as an interconnected expanse of trade, kinship, and cultural exchange. Centered in the Sulu Sea, the Sulu Sultanate played a pivotal role in this dynamic network, fostering ties that transcended modern national divisions. Families maintained connections across what are now Malaysia and the Philippines, bound by shared languages, traditions, and Islamic influences that wove a lasting cultural fabric. These historical bonds remain evident today in the Tausug communities of the southern Philippines and Sabah, where enduring traditions, cuisine, and linguistic affinities continue to reflect a legacy of unity.

Both Malaysia and the Philippines recognize the rich cultural legacy of the Sulu people and share a vested interest in preserving and supporting their heritage. Rather than allowing the arbitration dispute to drive a wedge between them, both nations must reinforce these historical ties, ensuring that Sulu communities remain respected, empowered, and included in regional progress.

However, the Sulu heirs’ arbitration case has created diplomatic challenges, with potential repercussions for economic and regional stability. This dispute serves only those seeking financial gain at the expense of national sovereignty. Rather than allowing external actors to exploit these tensions, Malaysia and the Philippines must collaborate to resolve this issue in a way that protects their shared interests while honoring their historical connection to the Sulu people.

Handling of the Sulu Claim:

Malaysia’s Stance

Malaysia has long maintained that Sabah is an integral part of its federation, a position reinforced by the 1963 referendum in which Sabahans overwhelmingly voted to join Malaysia. Until 2013, Malaysia continued a symbolic “cession payment” of RM5,300 to the descendants of the Sulu Sultanate, honoring an agreement made by British colonial rule. However, after the deadly Lahad Datu incursion, in which armed militants claiming loyalty to the Sulu Sultanate attempted to seize Sabah, Malaysia ceased these payments, citing security concerns.

The Philippines’ Position

The Philippines historically laid claim to Sabah, citing the Sulu Sultanate’s historical sovereignty over the region. However, in recent years, the Philippine government has distanced itself from the Sulu heirs’ arbitration case, asserting that it is a private legal dispute rather than an official state claim. Manila’s careful diplomatic stance reflects its desire to maintain strong relations with Malaysia while managing domestic nationalist sentiments on the issue.

Why Malaysia and the Philippines Should Stand United Against the Claim

1. Protecting Shared Regional and Economic Interests: Malaysia and the Philippines are not just neighbors—they are strategic partners in ASEAN, an economic and political bloc that emphasizes stability, development, and cooperation. Prolonged legal battles or deteriorating diplomatic ties could weaken ASEAN’s ability to present a united front on key issues, such as economic agreements and security policies.

In economic terms, the two nations benefit significantly from trade, with Malaysia being one of the Philippines’ top trading partners. In 2022, bilateral trade reached approximately $8.8 billion USD. Malaysian companies have invested in the Philippines’ banking, energy, and telecommunications sectors, while Philippine businesses are active in Malaysia’s retail and agriculture industries. A legal dispute of this nature could discourage investors, disrupt economic partnerships, and hinder development in both nations.

Additionally, the Sabah region plays a crucial role in labor migration, with over 800,000 Filipinos residing in the state, many of whom work in agriculture, construction, and domestic services. A prolonged dispute could lead to instability and new restrictions on Filipino workers, creating economic hardship for thousands of families.

A legal dispute of this nature could discourage investors, disrupt economic partnerships, and hinder development in both nations.

2. Preventing External Manipulation: The arbitration case is not merely a legal issue between the Sulu heirs and Malaysia—it has been influenced by external financial and geopolitical interests.

Therium Capital Management, a UK-based litigation funder, has financed the lawsuit in exchange for a share of any potential compensation. This highlights a troubling trend of international firms using historical grievances for profit, rather than pursuing legitimate justice. If successful, the enforcement of the arbitration award could place financial burdens on Malaysia’s public resources, ultimately affecting its taxpayers.

Beyond financial interests, regional instability benefits global powers that have vested interests in Southeast Asia. China, for instance, has been actively expanding its influence in the South China Sea, where both Malaysia and the Philippines have ongoing territorial disputes. The Sulu heirs, acting out of self-interest, have sought China’s support for their claim, a move that threatens both nations’ sovereignty. If China were to intervene, it could use the Sabah dispute as leverage to gain influence over the Philippines and Malaysia, potentially pressuring them on South China Sea negotiations. This is a situation neither nation can afford.

To counterbalance China’s increasing assertiveness, Malaysia and the Philippines must present a united front, ensuring that external actors do not exploit historical grievances to further their geopolitical ambitions.

3. Diplomatic and Political Considerations: A prolonged arbitration dispute could create diplomatic complications, even as Manila asserts its non-involvement. Malaysia, in turn, must recognize that the Philippines is balancing historical claims with modern realities. Instead of allowing legal tensions to strain bilateral relations, both nations should reaffirm their commitment to diplomacy.

Furthermore, if the Sulu heirs were to succeed in enforcing their arbitration award, it could set a dangerous precedent for other historical territorial or financial claims across ASEAN. This could encourage a wave of legal challenges over colonial-era treaties and land agreements, creating further instability across the region.

The Way Forward

The Sulu heirs’ arbitration case seeks to sow discord between two nations bound by shared histories and mutual interests. While Malaysia and the Philippines may hold nuanced perspectives on Sabah, their priority must be regional stability, economic growth, and ASEAN unity. Strengthening ASEAN’s legal framework is essential to preventing foreign litigation funders from exploiting historical grievances for financial or geopolitical gain. Allowing this dispute to persist serves only those seeking personal advantage at the expense of broader regional harmony.

To build a future based on collaboration rather than conflict, both nations must reaffirm their historical ties and commit to a shared vision of prosperity and solidarity—one that includes the Sulu people as stakeholders in a collective future. Moreover, the Sulu community in both countries should reject arbitration efforts that deepen divisions and create economic and social hardships. By opposing these exploitative claims, Filipino and Malaysian Sulus can reinforce their commitment to national unity, ensuring a future founded on mutual respect, stability, and shared progress.

REFERENCES

Golingai, P. (2024, March 24). Deep dive into Sulu. INQUIRER.net. https://globalnation.inquirer.net/229198/deep-dive-into-sulu

Malaysia hails ‘victory’ in row with Sulu sultan’s Filipino heirs. (2023, June 7). Al Jazeera. https://www.aljazeera.com/news/2023/6/7/malaysia-wins-decisive-victory-in-row-with-sulu-sultans-heirs

Malaysia protests new Philippine maritime laws that it says infringe on its territory. (2024, November 15). AP News. https://apnews.com/article/b0cd0fda853cf2d74c7d62188d72c895

Malaysia Sulu case. (n.d.). https://www.malaysia-sulucase.gov.my/

Malaysia/Philippines, Conflict over the Sultanate of Sulu | How does law protect in war? (n.d.). https://casebook.icrc.org/case-study/malaysiaphilippines-conflict-over-sultanate-sulu

Parry, R. L. (2024, Nov 12). Court rules on Malaysia’s $15 billion Sulu saga after 146 years. The Times. https://www.thetimes.co.uk/article/court-ends-malaysias-15-billion-sulu-saga-after-146-years-sxz52b3tb

Sultan of Sulu’s Sabah claim: A case of ‘Long-Lost’ sovereignty? (n.d.). https://rsis.edu.sg/rsis-publication/rsis/1933-sultan-of-sulus-sabah-claim/

Yeoh, T. (2024, Aug18). Malaysia needs ASEAN to navigate a pathway between the West and the rest. East Asia Forum. https://eastasiaforum.org/2024/08/18/malaysia-needs-asean-to-navigate-a-pathway-between-the-west-and-the-rest/