Heirs of the Sultan of Jolo: Huge $15,000 Million Lawsuit with Roots in Spain

Eight Philippine Nationals, State of Malaysia, Tenant in North Borneo, Spanish Court, and Prohibition All Over Europe. The history of the heirs of the Sultan of Gulu is the history of a conflicting lease that has become the second most expensive arbitration in history and its origin in our country. Why arise? For oil, gas and palm oil a. A struggle to exploit resources caused these eight people to, for the time being, live in hiding. Year 1878. The Sultan of Joló leased some lands in Borneo to English businessman Alfred Dent and Baron and Consul of the Austro-Hungarian Empire in Hong Kong, Gustavus von Overbeck. The object of the contract was the perpetual lease to exploit the resources of those lands. At that time there were pearls and seagulls’ nests and wood. Price: Php 5,000 annually. Until then, those lands belonged to Spain, but they belonged to the Sultan. The “order” system was entirely feudal: farmers and the local population paid tribute to the local nobility; these, to the superior nobles; These are for the Sultan. And the power of God and the Spanish crown. What seemed to be a document without much substance in the 19th century ended up being a headache for Malaysia in that contract which was signed in Javanese and of which there are more than four translations, the key word being “bagak”, what does a lease mean? What seemed like a flimsy document in the nineteenth century ended up being an irritant for Malaysia. Mobile Desktop Icon Image Amplifier and App AMP Code 8490 APP Code At the same time as the lease, the Sultan issued a so-called Letter of Authorization, a kind of document by which powers are given to Dent and Overbeck to administer those areas; For example, to command armies, to mint money, to dictate laws… One of the main points of the contract is that a clause has been included whereby in case of dispute they shall submit to the judgment of the Consul-General of Borneo. In practice, as has been shown, this is equivalent to submitting to arbitration if there is a problem, because over the years the Consul General number has disappeared. Changing hands In 1903 an addendum was signed to increase the price to 5,300 pesos a year, the equivalent of about $1,200 US. In addition, the area extended to some of the islands that were also in dispute. By that time, Spain had already given up on the region, but the original contract was under the umbrella of our country’s crown. Overbeck and Dent, meanwhile, had transferred the rights to their exploitation to the North Borneo Trading Company, a sort of corporation that had been in the United Kingdom—which was the landlord after Spain—and to which the English crown had given the power to command and manage the lands. . The best known example: the East India Company, which administered India for the United Kingdom. The year is 1946. The North Borneo Trading Company is bankrupt and it is the UK that continues to pay the rent. But after almost two decades, the region became part of Malaysia … which continued to fulfill the contract until 2013. At that time, the Malaysian state stopped paying, taking advantage of some riots in the region. Then the judicial ordeal began to take shape. The big change happened decades ago, and therein lies the crux of the matter. In the 1960s, oil was discovered in those lands. In the 1980s and 1990s, technology was developed to be able to exploit it; Also in the 1980s, gas wells in the region were ignited, which could be exploited from the year 2000. Finally, the palm oil industry arose, of which that region is the main global producer. It has shifted from mining pearls, seagulls’ nests and lumber to oil, gas and palm oil. All for $1,200 a year. For this reason, since the 1960s, the Sultan’s heirs have tried to renegotiate or terminate the contract with Malaysia, without much luck. You had to go the wrong way. When that country stopped paying in 2013, the sultan’s heirs turned to legal advice. Years later, they found Paul Cohen and Elizabeth Mason, who took over the case and assigned the Spanish law firm B. Cremades y Asociados to take charge of investigating whether it had a trail and taking it to court in Spain. Bernardo Cremades, Jr. took the reins and started the legal journey. In 2018, the eight heirs of the Sultan of Jolo filed a lawsuit with the Madrid Supreme Court of Justice for the appointment of an arbitrator to appoint an arbitrator, on the basis of the fact that the lease has a connection with Spain and that it was signed in Spanish territory; One party was a Spanish subject; The object was landed on Spanish territory; And the payment was made for years on Spanish soil. It seems that he had everything to make history in our country. Malaysia did not appear as a party and the Spanish Ministry of Foreign Affairs notified that country through its embassy in Spain. Everything went ahead and in 2019 the case was filed and Gonzalo Stampa was appointed as arbitrator who accepts the arbitration and divides it into two phases: one of jurisdiction and the other of merit in which the merits of the matter are determined. In September of that year, a disparate and highly controversial event occurred in Malaysia: the State Attorney General sent a letter to the arbitrator and plaintiffs, acknowledging the existence of the contract, the existence of a breach and offering compensation, all conditional on the withdrawal of the contract-arbitration. No agreement was reached and the process continues. Second Sultan of Joló ABC A month later, the Malaysian Attorney General sent a second letter saying that they did not recognize the arbitrator’s authority and that they would go to their country’s courts to stop everything. A Malaysian court dictates it…but it doesn’t apply in Spain or in Europe because such orders are not allowed here. Informed sources also indicate that it was said in this matter that if any of the plaintiffs or their lawyers set foot in Malaysia they would be “subject to execution”. In May 2020, Gonzalo Stampa asserts that he has jurisdiction to resolve the issue and gets to the bottom of the matter, despite the fact that Malaysia has not yet appeared in person, and despite a copy of everything being sent to him. What do the eight heirs demand? Three representations: that there has been a breach of contract; that the contract is so advantageous to one and detrimental to the other, that the rent must therefore be settled or the payment re-balanced; Permanent contracts can be terminated by either party in good faith. Future benefit In the economic field, B. Cremades has investigated the extent to which Malaysia has benefited and made some future projections; Huge sums of money would serve as basis in the case. Until 2013, according to the investigation, that country received $50,000 million for oil and gas exploitation. Until 2044 it is said to have an additional 80,000 million for it, plus another 9,000 million for palm oil. In this sense they end up asking for compensation calculated as a percentage of the exploitation rights: 32 billion dollars. At this point, Malaysia’s maneuvers intersect in an attempt to put an end to this process. This country submits a motion for invalidation of claims for infringement of fundamental rights for not being notified of the appointment of the arbitrator. Spain’s Ministry of Foreign Affairs issues a report within hours acknowledging that it made poor contacts and that Justice orders that Stampa’s appointment be revoked. Malaysia asks for the arbitrator’s jurisdiction to be abolished…but everything ends up and without Malaysia’s objection, giving wings to the heirs for subsequent moves. The appointment is canceled but not because Stampa has jurisdiction, as the arbitration is transferred to France. We are already at the end of 2021 and a French company has appeared representing Malaysia. In February, after three months, the case arrived. The contract was terminated and Malaysia was forced to pay $14.920 million, the second largest prize in history. But this will not be the end, because the judicial path is much wider. So much so, that this still forced the eight heirs to remain hidden somewhere in Southeast Asia. During 2020, 2021 and 2022, lawsuits crossed between the parties, requests and actions … Among them is the appeal of the French judiciary, the request to annul the final judgment and also a complaint from Malaysia against Stampa, for which is being investigated in a case of rape and insubordination in the Madrid court. The case became a matter of state in Malaysia after which it is time to implement the decision in all this legal chaos. What was collected 15,000 million dollars. To do this, it focuses on the Malaysian oil company, Petronas, which has subsidiaries in many countries of the Old Continent, including Spain. The first step was in July of this year to go to Luxembourg to implement it, which led to taking precautionary measures and confiscating the shares and accounts of two companies affiliated with Petronas. And in September they also decided to take him to Holland, to The Hague, to order his execution there also, which is pending. Although, these are only the first two steps that the heirs plan to take to get the money. Now, as expected, a tour of several countries in Europe awaits them. However, all of this is subject to a high degree of uncertainty about the path taken by Malaysia, which faces elections soon. In fact, this reason has become a matter of status there. At stake is $15,000 million.

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