PETALING JAYA: The US$15bil (RM70.3bil) claim by the United Tausug Citizens (UTC) is concerning and must be addressed by Malaysia, says Datuk Seri Azalina Othman Said.
The Minister in the Prime Minister's Department (Law and Institutional Reform) likened UTC's claims, which constitute about 16% of the national budget, to an extortion scheme.
"Malaysia recently faced a baseless claim from the UTC demanding US$15bil and recognition over Sabah. Such demands threaten the integrity of sovereign states and the principles of justice.
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"The UTC's threat to sue Malaysia in the United States is alarming.
"We must address these spurious claims that risk 16% of our national budget and exploit arbitration for profit, akin to extortion schemes," she said in a post on X on Tuesday (March 12).
Azalina said she had spoken about the Sulu issue and risks of third-party litigation funding (TPLF) to state sovereignty when she was in Paris, France last year, and also the 2024 Commonwealth Law Ministers Meeting that took place in Zanzibar, Tanzania earlier this month.
"TPLF often prioritises profit over justice, challenging the core purpose of our legal system," she said.
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Citing an example, Azalina said the Sulu claimants' legal action against Malaysia was funded by British global litigation fund Therium Capital Management Ltd (Therium).
"The Sulu case, fuelled by litigation funder Therium, raises concerns about the next target of these 'vulture' funders. It's a stark reminder of the need for integrity in our justice system," said Azalina.
She added that while litigation funding is crucial for access to justice, its status as a multi-billion dollar industry raises questions about its true intent.
"A lack of regulation poses a global threat, calling for urgent oversight," she added.
Azalina said the secretive nature of TPLF in sham arbitrations necessitates global regulatory oversight and ethical standards to prevent abuse and exploitation.
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She also said calls for transparency in TPLF are increasing, as US lawmakers and the European Parliament had proposed to regulate this industry and mitigate national security risks.
"Litigation funding must be transparent and regulated to prevent abuse. Malaysia advocates for ongoing dialogue to regulate this industry effectively," she said.
UTC had asked the Malaysian government for an immediate payment of US$15bil in what it dubbed "cession money".
The group also sought the recognition of UTC as a "sovereign and independent state kingdom".
The UTC claims came after failed attempts by the so-called heirs of the defunct Sulu sultanate to seek compensation totalling US$14.94bil (RM68.8bil) against Malaysia.
