Malaysia fights $15bn asset seizure bid

Malaysia fights $15bn asset seizure bid

Heirs of 19th century sultan trying to enforce European arbitration award that targets Petronas

A man walks past the Petronas Twin Towers, headquarters of the Malaysian state-owned oil company, in Kuala Lumpur. Heirs of a 19th century sultan are trying to seize overseas assets of Petronas in order to enforce a European arbitration ruling against Malaysia. (Reuters File Photo)
A man walks past the Petronas Twin Towers, headquarters of the Malaysian state-owned oil company, in Kuala Lumpur. Heirs of a 19th century sultan are trying to seize overseas assets of Petronas in order to enforce a European arbitration ruling against Malaysia. (Reuters File Photo)

KUALA LUMPUR: Malaysia has vowed to challenge a move by the heirs of a former sultan to seize its Dutch assets as part of the descendants’ efforts to enforce a US$15-billion arbitration award against the Malaysian state.

The heirs of the former sultan of Sulu on Thursday asked a Dutch court for permission to seize Malaysian assets in the Netherlands, where some of Malaysia’s biggest companies have operations — including the state oil company Petronas.

The heirs are targeting Malaysian assets abroad following the government’s refusal to recognise the $15-billion arbitration award by a French court in February this year. The ruling found it had reneged on an 1878 land leasing agreement between a British company and the last sultan of Sulu.

Malaysia has said it does not recognise the heirs’ claim and that the arbitration, in which it did not participate, was illegal.

Malaysia obtained a stay on the ruling pending an appeal, but the award remains enforceable outside France under a United Nations treaty on international arbitration.

“Malaysia will spare no expense in defending its sovereignty and its assets abroad wherever they may be situated,” law minister Wan Junaidi Tuanku Jaafar said in a statement.

He said the government would take legal action in the Netherlands to “resist and set aside” any attempt to seize assets, and that the country has initiated a global strategy to proactively challenge other possible seizure bids.

A spokesperson for the heirs did not have an immediate comment.

Wan Junaidi also said the assets of Petronas were not assets of the government of Malaysia.

“It would be an abuse of the process of any court to seek enforcement against such assets,” he said.

The Malaysian government is the sole shareholder of Petronas and collects an annual dividend from the oil company.

Petronas did not have an immediate comment on the government statement. It has not commented on the heirs’ court petition in the Netherlands.

In July, two Luxembourg-based subsidiaries of Petronas were seized by court bailiffs as part of the heirs’ effort to claim the award.

Petronas has described the Luxembourg seizure as “baseless” and vowed to defend its global assets.


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