As the initial venue of the Sulu Arbitration, Spanish courts have played a significant role in the fortunes of the Sulu claimants’ case by appointing, dismissing, and ultimately convicting Spanish arbitrator Gonzalo Stampa. Image Source: Euroactiv

His case, linked to the long-running dispute over Sabah between Malaysia and the heirs of the Sultan of Sulu, has ignited a debate within the international arbitration community about judicial oversight and arbitrator independence.

Stampa, one of Spain’s most prominent arbitrators, was convicted earlier this year by Spain’s Supreme Court for contempt of court. The ruling upheld a six-month prison sentence and a one-year ban on practicing as an arbitrator after he ignored an order from the Madrid High Court of Justice to cease acting as arbitrator in the multibillion-euro case brought by the Sulu heirs against Malaysia.

The ruling upheld a six-month prison sentence and a one-year ban on practicing as an arbitrator after he ignored an order from the Madrid High Court of Justice.

The order to stop came after the court annulled his appointment, ruling that Malaysia had not been properly notified during the arbitration’s initiation. Despite this, Stampa continued and later issued an award requiring Malaysia to pay more than €13 billion for the exploitation of resource-rich lands in Sabah to eight Filipinos claiming to be heirs of the defunct Sulu Sultanate.

The Spanish and Ibero-American Arbitration Club (CEIA) has insisted that Stampa’s conviction should not be interpreted as a threat to arbitration in Spain. CEIA leadership has emphasized that the matter was procedural rather than substantive, concerning a jurisdictional dispute between the courts and the arbitrator rather than a critique of arbitration itself.

Indeed, critics of Stampa’s conviction argue that the arbitrator’s breach was procedural and should not have been met a criminal conviction.

Supporters, however, note that the distinction between procedural and legal wrongdoing is precisely the point. Stampa’s removal as arbitrator was an institutional response to a procedural irregularity. However, when he chose to ignore that removal and continue acting as if the annulment did not exist, the issue crossed into criminal defiance. In their view, the conviction was not about criminalizing arbitral conduct but about upholding the authority of national courts and ensuring that even arbitrators remain bound by the rule of law.

Stampa’s removal as arbitrator was an institutional response to a procedural irregularity. However, when he chose to ignored the annulment, the issue crossed into criminal defiance.

In any case, this outcome has sparked divided opinions within the arbitration community. Some practitioners fear the case could constrain arbitrators, making them overly cautious in complex disputes. Others argue it reinforces accountability and respect for judicial authority, ensuring that arbitration does not become a mechanism for circumventing due process, especially across borders from Spain to Luxembourg.

The broader concern, however, lies in the international ramifications—particularly given the high geopolitical stakes tied to the Sabah dispute. Indeed, the ICCA 2026’s central theme, “International Arbitration: Local, Global or Both?”, now appears more timely than ever. The Sulu arbitration has highlighted tensions between local judicial authority and global arbitral practice, particularly when cross-border disputes touch on issues of sovereignty and state immunity.

The ICCA 2026’s central theme, “International Arbitration: Local, Global or Both?”, now appears more timely than ever.

The Sulu heirs’ legal campaign, which sought to enforce the massive award by seizing Malaysian state assets abroad, has already caused tensions between European institutions and Southeast Asian governments. It also raised questions about the ethical responsibilities of litigation funders and law firms involved in such politically sensitive disputes. Indeed, as proceedings against Stampa conclude, further civil and criminal actions in Spain and other European jurisdictions targeting the heirs, their lawyers, and the financiers behind the claim are anticipated.

While Spain’s arbitration community works to reassure global investors and institutions of its reliability, the episode serves as a reminder of another equally important reality: international arbitration cannot exist in a vacuum. It depends on the confidence of states and corporations that expect legal certainty and procedural fairness. In a world where vast economic and political interests intersect across continents, even a single procedural misstep—or defiance of a court order—can reverberate far beyond the hearing room.

The episode serves as a reminder that international arbitration cannot exist in a vacuum.

As the Sulu case approaches its likely conclusion in the French courts, attention is shifting from the claimants themselves to the network of lawyers and funders who enabled their far-reaching campaign. For them, the events surrounding Stampa’s conviction signal that arbitration is not a game detached from the realities of law and diplomacy.

Whether Madrid’s ICCA 2026 can overcome the lingering doubts cast by this case remains to be seen—but its discussions on the balance between global arbitration and local legal control will be held under the unmistakable shadow of the Sabah dispute.

REFERENCES

ICCA 2026. (n.d.). Retrieved October 27, 2025, from https://icca2026.es

KnowSulu. (2025, October 17).

KnowSulu. Spain’s top court upholds criminal conviction of arbitrator in Sulu case against Malaysia. https://knowsulu.ph

Zarzalejos, Á. (2025, October 21). Caso del Sultán de Joló: La nueva guerra judicial millonaria que esconde la condena penal a Stampa. El Confidencial. https://www.elconfidencial.com