Malaysian PM vows to protect assets abroad as Sulu sultan’s descendants stake claim

Noah Lee and Nisha David
2022.07.19
Kuala Lumpur
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Malaysian PM vows to protect assets abroad as Sulu sultan’s descendants stake claim Taxis wait to refuel at a Petronas fuel station with the Petronas Twin Towers in the background in Kuala Lumpur, Feb. 10, 2016.
[Olivia Harris/Reuters]

Malaysia’s prime minister vowed Tuesday to protect the country’s assets abroad after descendants of a sultan from the neighboring Philippines moved last week to seize some international assets of the state-owned petroleum company to settle an old land dispute.

Prime Minister Ismail Sabri Yaakob said a special task force had been formed to look into the seizure notice served on two European assets of the oil firm Petronas by heirs to a sultan of Sulu, an archipelago in the far southern Philippines located near Sabah state in Malaysian Borneo.

“They will look into not just Petronas’ assets but our other assets abroad. That was the job given to the special task force,” Ismail Sabri said in response to reporters’ questions on the sidelines of a day-long National Security Conference in Putrajaya, where the issue of Malaysian sovereignty in disputed waters of the South China Sea was discussed.

“We will protect our assets abroad via legal means. I give you the assurance that we will not compromise and will defend our rights and the country’s sovereignty.”

On July 12, Petronas confirmed that its two subsidiaries had been served with a seizure notice in Luxembourg, but said those units’ assets had been previously divested and repatriated.  

“Petronas views the actions taken against it as baseless and is working vigorously to defend its legal position on this matter,” the company said in a statement.

On the same day, Britain’s Financial Times reported that representatives of the descendants of a sultan of Sulu had seized the assets, which manage Petronas’ interests in Azerbaijan and could be worth more than U.S. $2 billion.

According to a report by the Reuters news agency, the seizure was a means to begin enforcement of a nearly $15 billion arbitration award by a French court to the late sultan’s heirs.

The court had ordered Malaysia to pay nearly $14.9 billion to the sultan’s descendants to settle a dispute over a land deal related to the oil-rich region of Sabah signed back in 1878, when the area known at the time as North Borneo was part of the British Empire. Sabah has long been at the center of a territorial dispute between Malaysia and the Philippines.

However, Malaysia’s law minister, Wan Junaidi Tuanku Jaafar, said last week that Kuala Lumpur did not recognize the ruling and that the Paris Court of Appeal, on July 12, had issued a stay on that arbitration ruling because its enforcement could infringe on Malaysian sovereignty.

“The [Paris Court of Appeal’s] Suspension Order is the result of various legal actions taken by the government of Malaysia since the claim was filed to end all claims and ensure that Malaysia’s interests, sovereign immunity and sovereignty remain protected and preserved,” he said in a statement.

The arbitration award, he added, could not be enforced in any country until the Paris Court of Appeal made a decision.

BenarNews reached out by email to the law firm representing the Sulu sultan’s descendants, but did not immediately hear back.

Clear and present danger’

Meanwhile, activities in the disputed South China Sea were another threat to the nation’s sovereignty, according to Malaysian Navy Chief Mohd. Reza Mohd Sany, who was one of the panelists who spoke at the National Security Conference.

“The overlapping claim in the South China Sea territories have been ongoing since the 1980s and they are a clear and present danger to the country’s sovereignty,” he said.

“I do not know how else to say this because as of today there are six countries that put their claims on the territories in the South Shina Sea, including China.

In addition to China, six other Asian governments have territorial claims or maritime boundaries in the South China Sea that overlap with the sweeping claims of China. They are Brunei, Indonesia, Malaysia, the Philippines, Taiwan and Vietnam. While Indonesia does not regard itself as party to the South China Sea dispute, Beijing claims historic rights to parts of that sea overlapping Indonesia's exclusive economic zone.

“The stern and assertive as well as gray zone activities by China, the presence of China assets, the land reclamation, the provocation by their assets have heightened the tension between the countries that have claims on the area,” the Malaysian Navy chief said.

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