Look here: Azalina delivering a speech virtually at the International Arbitration Colloquium 2023 held in Kota Kinabalu, Sabah. — Bernama
Azalina: Law to stop such territorial suits to be passed
KOTA KINABALU: A State Immunity Act will be passed to protect Malaysian states from future frivolous legal suits such as the one brought by the self-proclaimed heirs of the long-defunct Sulu Sultanate, says Datuk Seri Azalina Othman Said.
The Minister in the Prime Minister’s Department (Law and Institutional Reform) said the new law will reflect the general principles of international laws on sovereign immunity, including effective service on foreign states and upholding the rights and interest of parties concerned.
The law will also safeguard the sovereignty of states and preserve and promote friendly relations with other states, Azalina told the International Arbitration Colloquium 2023 themed “State Sovereignty and Immunity in Commercial Arbitration” here yesterday.
She added that no state should be subject to the jurisdiction of the courts of another state, adding that this was a principle recognised under customary international law.
“The government of Malaysia has consistently raised timely objections against the claimants’ blatant attempt at forum shopping, the jurisdiction of the arbitrator, the continuation of arbitral proceedings despite the Spanish Court’s orders, the unprecedented shift in the seat of arbitration, as well as the delivery of the purported ‘Final Award’,” she said via Zoom from Japan.
The fact that the Sulu claim was being financed by an international litigation funder, Therium, has raised several alarm bells, specifically in terms of the ethical conduct, integrity, professionalism and good practices by arbitrators, which are the cornerstones of any legitimate arbitration.
“This is fundamental to preserve the confidence of any parties that choose arbitration to settle disputes, failing which, the whole arbitration system will be undermined.”
On the Sulu claim itself, Azalina said the recent landmark decision by the Hague Court of Appeal on June 27 is the first decision that rejects the claimants’ attempt to recognise and enforce the purported Final Award of US$14.9bil (RM62.59bil) against Malaysia.
She added the decision was unequivocally made based on three grounds:
Firstly, that no ‘Final Award’ could have been lawfully rendered due to the annulment of Dr Gonzalo Stampa’s appointment as arbitrator by the Spanish court that appointed him;
Secondly, that no valid arbitration agreement existed; and lastly, that the exceptional stay of enforcement of the purported Final Award in Paris renders the sham award incapable of recognition and enforcement in The Netherlands.
“It is hoped that the success obtained through The Hague Court of Appeal decision will contribute to subsequent successes in ongoing proceedings commenced by the government in challenging the recognition and enforcement of the purported Final Award in other jurisdictions, including in Luxembourg.
“Keeping in mind the successive victories achieved by Malaysia, the government remains devoted to our legal pursuits in ensuring that the purported Final Award will be eventually annulled by the Paris Court of Appeal.
“Rest assured that we will not succumb to any of the unscrupulous enforcement tactics utilised by the claimants.
“This would include taking the necessary legal actions in certain identified jurisdictions against Therium – which is known to assist the claimants in commencing this sham arbitration – and to ultimately end the enforcement of the illegal awards,” Azalina said.Legal experts at the colloquium echoed Azalina’s point that Malaysia needed a sovereignty immunity law to better protect its interests domestically and abroad.
Prof Robert Volterra said other countries like the United Kingdom, United States and Singapore have introduced such laws.
He added that Stampa had made a faulty judgement when he mixed sovereign territorial rights with commercial lease agreements in his decision to award US$14.92bil to the so-called Sulu heirs.
Another legal expert, Datuk Firoz Hussein Ahmad Jamaluddin, said he was confident that the Sulu claim would end when the final Paris judgement is made on Stampa’s award in 2024.
Other experts who made similar points were Chan Leng Sun and Alvaro Lopez de Argumendo.
