The Malaysian state of Sabah is at the heart of legal proceedings drawing attention to Sulu history and the role European arbitration plays in Southeast Asia. Image Source: Aliran

While legal representatives of the claimed Sulu heirs have indicated intentions to continue legal efforts regardless of the ruling, multiple jurisdictions thought to be arbitration-friendly have already been exhausted by the attempts to enforce awards against Malaysia and the efforts to seize its assets in Europe.

While Spanish, French, Dutch and Luxembourg courts have repeatedly ruled that such methods of seizure are illegal, the hearing on July 7th is anticipated to be a final review on the legitimacy of the US$14.92 billion award itself.

How Did We Get Here?

1878 – A treaty is signed between the Sultan of Sulu and European merchants, granting access to North Borneo. Debate continues over whether it represented a lease or a cession. Malaysia maintains it was a permanent cession of sovereignty.

1936 – Jamalul Kiram II, widely regarded as the last Sultan of Sulu formally recognized by foreign governments, dies without an officially appointed successor.

1939 – The High Court of North Borneo formally recognizes nine heirs of the late Sultan Jamalul Kiram II as rightful recipients of the annual cession payments under the 1878 agreement, establishing the post-sultanate payment framework.

1963 – Sabah joins the Federation of Malaysia following a UN-backed survey confirming public support for the decision. Malaysia continues the symbolic cession payments of RM 5,300 to individuals claiming descent from the last recognized Sultan.

Jamalul Kiram II was the last officially recognized Sultan of Sulu, passing away in 1936. While several individuals have since claimed succession, none of their coronations have received formal recognition from the Philippines. As a result, the legitimate successor to Kiram's dynasty remains a matter of dispute among individuals claiming descent today. Image Source: The Times

Armed Insurgency and Legal Aftermath in Spain

March 2013 – Malaysia suspends payments after the Lahad Datu incursion, in which armed followers of one of the claimed Sulu heirs invade and attempt to assert a territorial claim over Sabah. Dozens are killed or wounded in a month long standoff.

Feb 2018 – Eight individuals claiming to be descendants of the Sulu Sultan initiate arbitration proceedings in Madrid.

May – July 2019 – Lawyer Dr. Gonzalo Stampa is appointed as sole arbiter over the dispute by the High Court of Justice of Madrid; the Sulu claimants formally deliver a Notice of Arbitration to the Malaysian government via its embassy in Madrid.

January 2020 – The High Court in Sabah rules that the 1878 Agreement contains no clause allowing arbitration. It declares that Gonzalo Stampa lacks jurisdiction over the dispute and issues an injunction halting all arbitration efforts by him and the claimants.

May 2020 – Gonzalo Stampa issues a Preliminary Award (an early ruling on parts of a dispute), ruling that the Sabah dispute was within his own jurisdiction as an arbitrator.

June 2021 – The High Court of Justice in Madrid annuls arbitrator Gonzalo Stampa’s appointment, ruling the proceedings were invalid and beyond Spain’s jurisdiction.

10 years after the Lahad Datu Incident, Malaysian service members and family of casualties remember their losses. Image Source: Bernama Pic

Improper Relocation to France and Controversial Award

September 2021 – A Paris court grants exequatur (preliminary recognition) of a partial arbitration award by Stampa, encouraging the claimants to initiate arbitration proceedings in France.

October 2021 – Gonzalo Stampa officially relocates the arbitration from Madrid to Paris despite the annulment of his authority by Spanish courts, later resulting in his conviction for contempt of court.

December 2021 – The Paris Court of Appeal suspends its own earlier exequatur ruling, halting the Paris-based arbitration. Stampa disregards the suspension order.

February 2022 – Stampa issues a final award of US$14.92 billion in Paris in favor of the Sulu claimants in defiance of both Spanish and French court decisions.

Attempts by Sulu Claimants to Seize Assets and their Rejection in all Jurisdictions

April 2022 – A French court grants Malaysia a stay of execution on the final arbitration award, halting any enforcement actions in France while further appeals are heard.

May 2022 – A Luxembourg court grants recognition of the Paris award, allowing enforcement steps to proceed.

July 2022 – The Paris Court of Appeal grants Malaysia a stay of enforcement of the award. The same month, bailiffs in Luxembourg seize assets of two Petronas (a Malaysian oil and gas company) subsidiaries based on the arbitration award.

December 2022 – A Luxembourg district court hears Malaysia’s application to lift the asset seizure order.

January 2023 – The Sulu claimants attempt to enforce the award in the Netherlands while the Luxembourg court sets aside the July 2022 seizure, citing procedural issues by the Sulu claimants, including fraudulent use of false addresses.

June 2023 – The Paris Court of Appeal rules that Stampa lacked jurisdiction and annuls the earlier French exequatur of his partial award. The same month, the Hague Court of Appeal in the Netherlands also rejects enforcement, finding procedural failures in the claimants’ case.

December 2023 – A Madrid criminal court convicts Gonzalo Stampa of contempt of court for defying the High Court’s annulment order. He receives a six-month jail sentence and is banned from serving as an arbitrator for one year.

Final Legal Outcomes

May 2024 – The Madrid Court of Appeal rejects Stampa’s appeal on his conviction and upholds both the six-month prison term and one-year professional ban.

November 2024 – France’s highest court, the Court of Cassation, confirms that the arbitration clause in the 1878 agreement is void, rendering the award unenforceable under French law.

September 2024 – The Supreme Court of the Netherlands rejects the Sulu claimants’ appeal, upholding the Hague Court of Appeal’s June 2023 decision against enforcing the arbitration award. This final and binding ruling ends their enforcement efforts in the Netherlands.

February 2025 – The High Court of Justice in Madrid reaffirms that the arbitration and Stampa’s actions lacked legal validity, dismissing an application to overturn the annulment of Stampa’s role as arbitrator.

July 2025 – The Paris Court of Appeal is set to hear Malaysia’s application to fully annul the US$14.92 billion award, potentially marking the final legal chapter of the dispute.

What Happens After?

The Paris Court of Appeal will likely be passing down what is a final ruling on the $14.92 billion arbitration award.

Over a decade after the Lahad Datu Incursion reignited dormant claims over Sabah, nearly every major European jurisdiction has rejected the legitimacy of the Sulu claimants’ efforts to enforce Stampa’s award.

With the claimants’ campaign rebuffed and its arbitral architect convicted, the July 7 hearing may not only decide the future of the case—but also set a precedent limiting the use of the arbitration system in politically sensitive disputes.

The Sulu claimants’ legal representatives—who are themselves beset by financial strains—have indicated an intention to continue the dispute. Where or by what means this will occur remains unclear.

REFERENCES

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Bernama. (2022, July 6). Malaysia secures stay of execution on Sulu arbitration award in France. Bernama. https://www.bernama.com/

Bloomberg Law. (2025, April 22). Litigation funder Therium conducts layoffs amid upcoming shift. Bloomberg Law. https://news.bloomberglaw.com/

Chambers and Partners. (n.d.). Litigation vs. arbitration: What’s the difference? Chambers and Partners. https://chambers.com/

Government of Malaysia. (n.d.). Timeline of key events in the Sulu case. Malaysia–Sulu Case Official Website. https://www.malaysia-sulucase.gov.my/

Khamitova, D., & Sassine, R. (2022, March 31). Can you still enforce awards in France that have been set aside? Clyde & Co. https://www.clydeco.com/

Kiram Fornan, N., Kiram, F. A., Kiram, S. T., Kiram-Guerzon, P., Kiram, T. M., Narzad Kiram Sampang, A., Sampang, J. K., & Sampang, W. R. K. (2024, November 7). Press release of Malaysia on the French Supreme Court decision in Sulu case. Jus Mundi. https://jusmundi.com/

Law Society Gazette. (2024, January 5). Arbitrator in $14.9bn case jailed following intervention by Malaysia. https://www.lawgazette.co.uk/

Ministry of Foreign Affairs, Malaysia. (2024, May 21). Madrid Court of Appeal confirms Sulu arbitrator Gonzalo Stampa’s conviction for contempt of court. https://www.kln.gov.my/

Nardell, G. (2024, February 3). Carry on regardless? The Sulu case, arbitrator authority and principles of recognition. Kluwer Arbitration Blog. https://arbitrationblog.kluwerarbitration.com/

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Piñeiro, J., Virzi, F., Ros, N., & Martín, L. (2024, August 22). International arbitration 2024: Spain. In Global practice guides. Chambers and Partners. https://practiceguides.chambers.com/

The Lawyer. (2025, June 10). Therium hands off case portfolio to Fortress in major shift. The Lawyer. https://www.thelawyer.com/