Malaysia Plans to Deter ‘Ridiculous’ Lawsuits With State Immunity Law

Kok Leong Chan
·2 min read

(Bloomberg) -- Malaysia is exploring laws to protect the country from what Law Minister Azalina Othman termed as “ridiculous” lawsuits such as the territorial claims made by the self-styled descendants of Sulu sultanate.

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“I have raised it in Cabinet and am now drafting the law,” Azalina said in an interview to Bloomberg News on Wednesday on the proposed state immunity act. Once the cabinet approves the policy, it will be discussed with different stakeholders and hopefully be tabled in Parliament in October, she said.

Azalina was referring to arbitration proceedings brought on by the so-called heirs of Sulu, the erstwhile rulers of what comprised the present day Borneo state of Sabah. The then sultanate had leased Sabah state to a British company in 1878 and the Borneo state was later absorbed into Malaysia.

READ: Malaysia’s $14 Billion Row With Heirs of Sulu Sultan: QuickTake

A French arbitration court in Paris last year ordered Malaysia to pay 62.59 billion ringgit ($15 billion) to the Sulu descendants over their claim.

A state immunity act would help shield the country from lawsuits in other jurisdictions.

The Sulu proceedings are “unfair” as neither the original 1878 agreement nor the 1903 Confirmation of Cession had any arbitration clauses, Azalina said, adding that the matter is also a cause for concern for other countries.

“Especially for countries that were colonized before,” she said, citing that many have gone through a similar process in the 16th or 17th or 18th centuries.

A court in Paris in March upheld a stay order obtained by Malaysia on enforcement of the award. The Southeast Asian nation will continue to take measures to safeguard its national sovereignty, Azalina said.

“I believe that we are right and we will defend ourself all the way to prove that we are right,” she said. “This is not only an abuse of the process, the claimant itself is questionable.”

The Sulu heirs’ legal team disagreed.

“International court cases and arbitrations occur and are enforced internationally,” said Paul Cohen, a co-lead counsel for the Sulu claimants and a lawyer at London-based 4-5 Gray’s Inn Square, in an e-mailed statement on Thursday. “It will be interesting to understand in due course what her legislation will achieve.”

--With assistance from Ravil Shirodkar.

(Updates with comments from Sulu heirs’ legal team in final paragraph.)

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