Sultan of Jolo case: ‘Someone has to pay for all this – we will claim for damages’

Malaysia’s Minister of Justice says that the $15 billion arbitration award over natural resource extraction rights in northern Borneo is a fraud

Malaysia’s Minister of Justice Azalina Othman Said, at an official event in Kuala Lumpur.
Malaysia’s Minister of Justice Azalina Othman Said, at an official event in Kuala Lumpur.gobierno de Malasia
Rafa de Miguel

Malaysia’s Minister of Justice Azalina Othman Said is currently traveling in Europe and made a stop in Madrid where she spoke to EL PAÍS via videoconference about the recent $15 billion arbitration award to the Sultan of Jolo’s heirs related to natural resource extraction rights in northern Borneo. Although a French court later invalidated the Spanish arbitrator’s award, Therium, a British litigation fund, is now pouring more money into helping the heirs, who are attempting to seize Malaysian government assets around the world, including some belonging to Petronas, the Malaysian public energy giant. Attorney Gonzalo Stampa, the arbitrator in the dispute, moved the venue from Madrid to French territory when the Spanish courts cancelled his arbitration appointment and backed Malaysia, which had petitioned for a dismissal of the case. Stampa is now facing criminal prosecution for disobedience.

Question. The Spanish justice system has initiated criminal proceedings against attorney Gonzalo Stampa for continuing with this arbitration case in violation of a court order. Why did you decide to visit Madrid?

Answer. The criminal justice system in Spain takes time… The date for the hearing is in 2024, but between now — June 2023 — and then, a lot of things are going on because Stampa decided to go forum shopping [change venues]. That’s also unfair to us, we thought the right place to settle was in Madrid. Once the court in Madrid made that decision, I would have thought [it] would have ended there. If Stampa was unhappy with the order of the court in Madrid, I thought he would have challenged it.

Q. Stampa moved the case from Madrid to Paris, arguing that it was to avoid Spanish judicial interference in the arbitration.

A. I’ve been admitted to the Malaysian bar since 1990. My understanding of alternative dispute resolution — I have a master’s in this from the London School of Economics — is that it must be a consented arbitration forum and arbitrator. You can’t be taking a trip [to find another venue] in ex parte order, based on whatever grounds. And regarding the amount… the first rule of thumb is that you have to agree; all parties must agree.

Q. What else are you asking the Spanish justice system to do?

A. The award of $15 billion is beyond unreasonable — it’s ridiculous. We really tried to settle this, but unfortunately, the system in Spain, our lawyers tell me, is that we have to wait for the criminal matter. I wanted to pursue a civil case, but I can’t because it will be a double whammy for the defendant. So I have to wait. This is the due process in Spain and we have a very good relationship with the Spanish… We respect the rule of law and the legal procedure, so we have to wait. But that’s going to cost us a lot of money. Now as to your question, my response is simple. At the end of the day, someone has to pay for all this, so we will claim for damages,

Q. Will your civil suit include Therium, the litigation fund that has spent $20 million to back the claims of the sultan’s heirs?

A. I believe that if we can find enough evidence of an intention from the beginning to deceive — an intention to subscribe to unlawful strategies or activities. I think we need to do what we need to do to defend our reputation. But I can’t say as of now, because there are multiple cases and jurisdictions [France, Luxembourg, The Netherlands]. So I don’t want Therium to come in and say, ‘Oh, are you threatening us?’ I’m just responding to your question. What will my country do? My response is that whatever new information we get, we need to do what we need to do.

Q. Is there more to this claim by the heirs of the Sultan of Jolo? A sovereignty claim perhaps?

A. I started by saying it must be about money because I challenged the plaintiffs to plead their case with the International Court of Justice if it was really about a territorial dispute [the inhabitants of the state of Sabah in northern Borneo, the area in dispute, voted in a referendum to be part of Malaysia when the new state was formed]. But the calculation by Stampa for the award of $15 billion includes the whole kitchen sink, the fridge, the kitchen, the dry cleaner, the whole state of Malaysia. The damages must be a reasonable amount based on a certain assumption and formula. But this [award] seems designed to push my government to maybe settle out of court, without thinking that we will fight back. We think we need to stop this and start fighting back.

Q. What’s your opinion on the role of litigation funds in the justice system?

A. Let’s be honest. Litigation funds are all about making money, right? They won’t fund litigation unless they’re sure they can make some money out of it. It’s a very common sense argument. But going to court is very expensive, so I understand litigation funding – they do legitimate funding. But from my perspective in a government that’s spending a lot of money on expensive lawyers and fees... the European Union may want to consider regulating litigation funding, to have some kind of compensation fund for defendants when the plaintiffs don’t get their way. You have to be able to back up your words with actions, to put your money where your mouth is. The French appeals court has awarded us €100,000 ($108,000) in damages. Who’s going to pay us? If you want the freedom to make money [by litigating], there must also be accountability. If you want to sue me – fine. But you have to compensate me if you’re wrong.

Q. Do you really think that in all this back and forth in European courts there is an element of white colonialism, as you have said?

A. We decided to do something different besides just going to court. We have a website in multiple languages like Tagalog, Spanish and French, because we believe that rightly or wrongly, the historical perspective must be made known. This is not just between company A and company B – it’s about claimants backed by a litigation fund alleging historical rights. I believe that my country is not being unfair. We are just defending our reputation and our right to defend ourselves.

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