Court Sides With Malaysia Over Royal Family Claim

Malaysia said on Wednesday it had obtained a stay order against the enforcement of a French arbitration court ruling over a colonial-era land deal.

The day before the heirs of the late sultan moved to seize two Luxembourg-based units of Malaysian state oil firm Petronas.

The heirs claim to be successors-in-interest to the last Sultan of Sulu, who entered a deal in 1878 with a British trading company over the use of his territory, now known as the Malaysian state of Sabah.

Malaysia took over the arrangement after independence from Britain, paying a token sum to the heirs annually. But the payments were stopped in 2013, with Malaysia arguing that no one else had a right over Sabah, which was part of its territory.

In February, a French court issued the $14.9 billion award in their favour, with Malaysia refusing to participate in the arbitration. Malaysia did not recognize the heirs’ claim and would take all steps to uphold the country’s sovereignty.

The Paris Court of Appeal on Tuesday allowed an application by the Malaysian government for the stay after finding that enforcement of the award could infringe the country’s sovereignty, Malaysia’s law minister Wan Junaidi Tuanku Jaafar said in a statement.

Petronas has described Tuesday's seizure as “baseless” and said it would vigorously defend its legal position.

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