Malaysia and the Last Sultan of Sulu

The last month has seen several twists in a fascinating decade-long legal case that pitted the Malaysian government against the heirs of a long-vanished Southeast Asian sultanate.

On June 12, Malaysia’s government obtained a stay order against the enforcement of a French court ruling ordering it to pay an eye-watering $14.9 billion to the legal descendants of Jamalul Kiram II, the last sultan of Sulu. The Paris Court of Appeal approved Malaysia’s application for the stay after finding that enforcement of the ruling could infringe the country's sovereignty, Malaysia’s Law Minister Wan Junaidi Tuanku Jaafar said in a statement.

In February, an arbitration court in Paris ordered Kuala Lumpur to make the payment to honor a deal that the sultan of Sulu signed in 1878 with a British trading company over the use of his territory, in what is now the Malaysian state of Sabah on the island of Borneo.

The Malaysian government’s request for a stay came after lawyers representing the sultan’s heirs moved to seize two Luxembourg-based units of Malaysian state oil firm Petronas. The Financial Times reported that the company’s Petronas Azerbaijan and Petronas South Caucasus units were served with a seize order by court bailiffs in Luxembourg on July 11. This was quickly confirmed by the company, which said in a statement that the actions taken against it were “baseless” and that the firm “is working vigorously to defend its legal position on this matter.”

Despite the stay order, the sultan’s heirs are ramping up their efforts to seize Malaysian government assets around the world, with their lawyers arguing that the February ruling remains legally enforceable outside France.

The heirs’ legal counsel has framed this rather brazen cash-grab as a case of justice long delayed, playing into the growing European awareness and guilt about the continent’s blood-edged colonial legacy.

“This case is the history of colonialism,” said Elisabeth Mason, one of the lawyers representing the sultan’s descendants, according to the Financial Times. “Unlike so many dispossessed, our clients have an ongoing contract since 1878 and, as such, have a path to justice where many others did not.”

Regardless of its legal merits, the case is an unusually clear reminder of the extent to which the legacies of colonialism continue to shape contemporary Southeast Asia.

At its height in the first half of the 19th century, the Sulu Sultanate covered eastern Sabah and the southern fringes of the Philippines, including what are today known as the Sulu Islands and the island of Palawan. But the polity did not long survive the U.S. conquest of the Philippine islands after 1898. Sultan Jamalul Kiram II (r. 1894-1915) joined the fierce Moro Rebellion against U.S. rule between 1899 and 1913, an episode that saw American forces commit widespread atrocities, before effectively surrendering in 1915 and accepting U.S. sovereignty over his former domain. Jamalul Kiram II was permitted to live out the remainder of his years his residence at Maimbung, in the Sulu Archipelago, where he died in 1936.

The legal dispute has its origin in an 1878 agreement made between the then sultan of Sulu, Jamalul Azam (r. 1862-1881), and two foreign traders: Baron de Overbeck, an Austro-Hungarian adventurer who had recently insinuated himself into becoming the maharaja of Sabah, and his business partner, Alfred Dent of the British North Borneo Company.

Under the agreement, Jamal ceded sovereignty over large parts of eastern Sabah to Dent and Overbeck, who agreed that they and their future heirs were to pay the heirs of the sultan 5,000 Mexican dollars per year. In April 1878, the Washington Post described the cession as “one of the greatest secured by a commercial company since the days of the famous East India Company.”

In 1936, Jamalul Kiram II died without heirs and the annual payments ceased, at least until 1939, when a North Borneo High Court Chief Justice Charles F. Macaskie named nine new court-appointed heirs. Malaysia took over the arrangement after its independence from Britain, paying a token sum – 5,300 Malaysian ringgit, or about $1,189 at the current exchange rate – that was split between the heirs each year.

The reason that the Malaysian government is taking the case so seriously, aside from the obvious question of the $15 billion that it stands to lose in its enforcement, is that it touches on a long-running dispute over the sovereignty of eastern Sabah. The Philippines staked a claim to the territories of the former British crown colony of North Borneo in 1962, on the grounds that certain putative heirs of Sultan Jamalul Kiram II had formally transferred sovereignty over the former sultanate to Manila.

In 1963, the Philippines broke off diplomatic relations with Malaysia, after Sabah was included in the Malaysian Federation established that year, and President Ferdinand Marcos prepared plans to invade and take back the region in the late 1960s. The Sabah dispute has remained a perpetual irritant in relations between Manila and Kuala Lumpur in the decades since, surfacing repeatedly and raising hackles on both sides.

It was also the inspiration for the so-called Lahad Datu incursion in early 2013, which saw a mini-invasion of Lahad Datu district in eastern Sabah by some 235 boat-borne militants from the southern Philippines, many of them armed. The incursion was launched on the orders of none other than the Sultan Jamalul Kiram III, another of the many surviving claimants to the throne of Sulu Sultanate, who once described himself as the “poorest sultan in the world.”

After this episode, which tore the scab off the Sabah dispute and again strained relations with the Philippines, the Malaysian government decided that it would stop making the annual “cession payments” to the heirs of the last Sulu Sultan – and that it would no longer entertain anyone else’s claim over Sabah, however nominal.

This prompted the descendants of the nine appointed heirs, the last of whom died in 1987, to initiate the present legal case. Malaysia refused to participate in the French arbitration process, and Prime Minister Ismail Sabri Yaakob has since pledged quite reasonably to fight the February ruling. In his statement earlier this week, Wan Junaidi said Malaysia did not recognize the heirs' claim and would take all steps to uphold the country's sovereignty.

Whether or not Malaysia succeeds in having this case thrown out, there are good reasons to expect that the legacies of the vanished Sulu kings, both legal and territorial, will continue to echo in the region’s politics for a long time to come.