9-1-2024 (KUALA LUMPUR) A Spanish arbitrator, Gonzalo Stampa, who previously awarded $15 billion to the descendants of a former sultan in a 19th-century land dispute with Malaysia, has been convicted of contempt of court. This development is considered a substantial victory for Malaysia in its ongoing efforts to annul the case.
Stampa faced accusations from both the Spanish state prosecutor and Malaysia for failing to adhere to a Madrid court ruling instructing the dismissal of the case, instead relocating it to a court in Paris. The recent ruling has sentenced Stampa to six months in jail and a one-year prohibition from operating.
The initial award, granted by Stampa in February 2022, amounted to $14.9 billion for the Sultan of Sulu’s heirs. Subsequently, the heirs sought to enforce the award against Malaysian state-owned assets worldwide. Although Malaysia secured a stay on the case in France, the ruling remains enforceable globally under a U.N. arbitration treaty.
Law Minister Azalina Othman Said expressed her satisfaction on social media, stating, “Congratulations to all Malaysians! The efforts by this (government) in addressing and putting a stop to the Sulu Fraud have not been in vain.”
The underlying dispute traces its origins to an 1878 agreement between European colonists and the Sultan of Sulu, covering parts of the southern Philippines and present-day Malaysia on the island of Borneo. Malaysia had been making annual token payments to the sultan’s heirs in line with the agreement, but payments ceased in 2013, leading the heirs to pursue arbitration.
Stampa’s fees for delivering the award amounted to approximately $2.3 million, as disclosed by court documents. Despite a setback in June 2023 when a Paris court upheld the Malaysian government’s challenge against a partial award, the heirs are actively working to strengthen their case in Madrid. In December 2023, they filed a criminal case against the Spanish justice system, alleging that a court clerk in Madrid improperly sent an email instructing Stampa to step down from the case.
