Malaysia Claims Victory in France Over $15 Billion Compensation Case

Malaysia has announced that it has won a case in France regarding a compensation of nearly $15 billion awarded to the heirs of a Southeast Asian sultan following a lengthy legal battle. The Malaysian government reported on Wednesday that the Paris Court of Appeal had annulled the award that had been granted to the eight descendants of the Sultan of Sulu, who ruled over tropical islands that are now part of the Philippines and the Malaysian state of Sabah, after Kuala Lumpur ceased annual payments dating back to the colonial era in 2013.

The case had been presented to various European courts, and in 2022, an arbitration court in France, led by Spanish lawyer Gonzalo Stampa, ordered Malaysia to pay $14.9 billion to the heirs. Malaysia subsequently appealed, and a Spanish court ruling in 2024 sentenced Mr. Stampa to prison, stating that he was not authorized to make such arbitration rulings.

On Wednesday, the Malaysian government announced that the Paris Court of Appeal had rendered its decision, completely annulling the ‘final award’ issued by Mr. Stampa on February 28, 2022. The court confirmed that Mr. Stampa did not have the authority to issue the so-called ‘final award’ due to the absence of a valid arbitration agreement binding Malaysia. Additionally, the judges ordered the claimants to pay €200,000 in legal fees.

The AFP was unable to immediately obtain a copy of the court’s decision. Various European courts, including those in France and the Netherlands, had already rejected the Sultan's descendants' request to enforce the 2022 ruling. Malaysia expressed hope that this latest decision would bring an end to the proceedings.

The former Sultanate of Sulu included parts of what is now the state of Sabah, Malaysia, an oil-rich region on the island of Borneo. Sabah came under European colonial control in 1878 under an agreement that stipulated the sultan and his descendants would receive annual financial compensation. Malaysia continued these payments after its formation in 1963 until they were halted in 2013 after a bloody incursion from the Philippine side of the Sulu archipelago, an area with historic territorial claims from the Philippines.

Determined to restore these payments, eight heirs of the sultan sought financial arbitration in Spain, which had been a colonial power in the Philippines until 1898. This arbitration was eventually moved to France.