Win for Malaysia at the Paris Court of Appeal with the December 9, 2025 decision ruling in favor of Malaysia over the heirs in this critical legal battle. Source: King of Hearts

The decision nullified the controversial $14.9 billion arbitration award that had been granted to the claimants. The December 9, 2025 ruling marks a significant milestone in the long-running and highly contentious legal battle between Malaysia and those asserting descent from the Sulu Sultanate. The court ordered the so-called heirs to pay €200,000 ($232,760) in costs to Malaysia. The Sulu Secretariat Special War Room said "Malaysia trusts that this victory will put an end to the baseless attempts by the so-called Sulu claimants — and their litigation funder, Therium — to extort money and assets from the people of Malaysia."

"Malaysia trusts that this victory will put an end to the baseless attempts by the so-called Sulu claimants — and their litigation funder, Therium — to extort money and assets from the people of Malaysia."

The Final Ruling

The Court’s decision, which came after extensive hearings and legal arguments from both sides, officially ends one of the most high-profile and closely watched arbitration cases in recent history. The claimants, who have been pursuing the huge award, based on a claim to the historical rights to land and resources in Sabah, sought to enforce the arbitration ruling that was handed down by former arbitrator Gonzalo Stampa in 2022.

However, the case took a critical turn when the French courts ruled that Stampa had no jurisdiction to hear the case. Stampa was convicted of contempt of court in the Sulu case for defying a Madrid court order to annul his appointment, resulting in a six-month jail sentence and a one-year ban from practicing as an arbitrator, which was upheld by Spain's Supreme Court in October 2025, making it a final ruling in Spain.

Despite this, the 2022 award had remained technically enforceable, creating a legal limbo that Malaysia has fought tirelessly to resolve. As a result of this latest court decision, the claimants now face a severe setback, as their legal right to seek the enforcement of the arbitration award in France and other jurisdictions is effectively nullified.

"As a result of this latest court decision, the claimants now face a severe setback, as their legal right to seek the enforcement of the arbitration award in France and other jurisdictions is effectively nullified."

A Major Setback for the Sulu Heirs

The ruling is a major blow to the supposed heirs of the Sultan of Sulu, who claim descent from the long-defunct sultanate that once governed parts of Borneo. The group launched efforts to start the arbitration in 2017, asserting that Malaysia breached the 1878 agreement, arguing that Malaysia’s annual payments, made until 2013, were “rent” for Sabah and that stopping them entitled the heirs to billions in damages.

While the arbitration tribunal ruled in favor of the claimants, the legal battle has been far from straightforward. Over the years, the heirs have suffered several legal defeats, including in Spanish, Luxembourgian, and Dutch courts, which have all sided with Malaysia, reinforcing the notion that the arbitration award was based on faulty grounds and invalid jurisdiction.

"Over the years, the heirs have suffered several legal defeats, including in Spanish, Luxembourgian, and Dutch courts, which have all sided with Malaysia, reinforcing the notion that the arbitration award was based on faulty grounds and invalid jurisdiction."

The decision also casts doubt on the financial backing behind the claimants' efforts. Despite the substantial legal fees required for such a prolonged case, it's unclear whether the heirs have sufficient resources or international support to continue their legal campaign. Moreover, this recent setback may discourage future investors or entities from supporting the case, given the heavy legal obstacles the claimants have faced. The ruling also represents a major blow to Therium, the litigation funder behind the claimants, which now faces the likelihood of substantial sunk costs and diminished prospects of recovering its multimillion-dollar investment in the failed arbitration campaign.

"The ruling also represents a major blow to Therium, the litigation funder behind the claimants, which now faces the likelihood of substantial sunk costs and diminished prospects of recovering its multimillion-dollar investment in the failed arbitration campaign."

What Happens Next?

With the French courts’ final ruling on the matter, the question on everyone’s minds is: what happens next? For Malaysia, the victory is significant, as it solidifies the country’s sovereignty over Sabah and effectively ends the claimants' pursuit of the massive financial compensation. The Malaysian government has been steadfast in its position, repeatedly asserting that the claim is without merit and based on colonial-era agreements that are no longer applicable.

And for supposed heirs of the Sultan of Sulu? With Therium scaling back its operations, the claimant's capacity to pursue multi-jurisdictional litigation is significantly diminished. Malaysia's annulment victory in Paris eliminates the award's enforceability in a key jurisdiction and renders the case unattractive to new funders, leaving the claimants with no viable path forward.

"The Malaysian government has been steadfast in its position, repeatedly asserting that the claim is without merit and based on colonial-era agreements that are no longer applicable."

For Malaysia, this victory is not just a legal one but a symbolic reinforcement of the country’s authority over Sabah. The legal case has been closely watched, not just by Malaysia and the Philippines, but by international legal experts, as it touches on issues related to sovereignty, colonial-era agreements, and international arbitration. Malaysia’s victory in the courts reaffirms the nation's commitment to resisting the growing trend of speculative claims backed by arbitration awards that often lack solid legal foundation.

"Malaysia’s victory in the courts reaffirms the nation's commitment to resisting the growing trend of speculative claims backed by arbitration awards that often lack solid legal foundation."

Moreover, this case also sets a precedent for future disputes over colonial-era agreements, particularly when it comes to arbitration in international forums. While the Sulu case may seem specific to Malaysia and the Philippines, it has broader implications for the way sovereign nations deal with claims arising from colonial-era treaties, especially in a post-colonial world where these agreements are often subject to reinterpretation by new generations.

A Cautionary Tale for Future Arbitration

The ruling also serves as a cautionary tale for those involved in international arbitration, especially when it involves claims with complex historical or colonial contexts. The case has highlighted the importance of adhering to proper jurisdictional procedures and the risks of relying on non-legally binding arbitration decisions that can be overturned in national courts. With this legal victory, Malaysia has not only protected its financial interests but also reaffirmed its position in the global legal community as a defender of sovereignty and international law.

The final ruling by the Paris Court of Appeal has marked a turning point in the protracted legal saga between Malaysia and the supposed heirs of the Sulu Sultanate. And with Therium suffering another great loss, pursuing any other avenues would simply be throwing money away, as all viable options have been exhausted. With the weight of multiple legal defeats and the recent French court ruling, Malaysia’s sovereignty over Sabah remains firmly intact, and the financial implications for the claimants seem increasingly unlikely.

As Malaysia breathes a sigh of relief, the case underscores the challenges and complexities of international legal disputes, especially those with historical and colonial dimensions. This legal victory not only strengthens Malaysia’s position but also serves as a reminder of the evolving nature of international arbitration in an increasingly interconnected world.

REFERENCES

Know Sulu. (2023, July 4). What comes after the July 7 Sabah arbitration ruling. Know Sulu. https://knowsulu.ph/

Know Sulu. (2025, July 22). Paris court to deliver final ruling on Sulu arbitration on December 9, 2025. Know Sulu. https://knowsulu.ph/

NST Online. (2025, December 10). Paris court quashes US$14.9bil Sulu award, orders claimants to pay Malaysia. New Straits Times. https://www.nst.com.my/

The Star. (2025, December 10). Paris Court of Appeal annuls 'final award' rendered by Gonzalo Stampa. The Star. https://www.thestar.com.my/