Luxembourg Bailiffs Seize Petronas Subsidiaries In Sulu Claim

The Luxembourg-registered subsidiaries, Petronas Azerbaijan (Shah Deniz) and Petronas South Caucasus, managed the state-owned energy company’s gas interests in Azerbaijan and could be worth more than $2bn.

Luxembourg Bailiffs Seize Petronas Subsidiaries In Sulu Claim

This will come like a shock for the Malaysians, in particular those in power who have rejected the claims and the legal moves made by a group of descendants of the late Sultan of Sulu.

A dramatic turn of events took place in Luxembourg where two subsidiaries of Petronas were seized by the descendants through their lawyers as part of their attempts to gain access to their $15bn claim against Malaysia.

This is a dramatic escalation of the legal dispute linked to an agreement signed 144 years ago.

The Financial Times says representatives of the heirs of the last Muslim sultan of Sulu, who claimed to hold land in what is now the oil-rich Malaysian state of Sabah, informed that bailiffs in Luxembourg seized the holding companies on behalf of their clients on Monday.

The Luxembourg-registered subsidiaries, Petronas Azerbaijan (Shah Deniz) and Petronas South Caucasus, managed the state-owned energy company’s gas interests in Azerbaijan and could be worth more than $2bn.

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The Sulu claim

This could be the beginning of a massive escalation in the claims in the coming months.

In February, the Malaysian government was ordered to pay the heirs of the previous Sulu ruler at least US$14.92 billion (RM62.59 billion).

This is because the 1878 agreement that Sultan Jamal Al Alam, Baron de Overbeck, and Alfred Dent of the British North Borneo Company signed has been broken.

Following the Lahad Datu armed incursion, Malaysia ceased paying Sultan Sulu's heirs their yearly RM5,300 cession money in 2013.

The decision was made by Spanish arbitrator Gonzalo Stampa at a Paris, France arbitration court.

The article stated that Stampa decided the 1878 contract constituted a commercial "international private leasing arrangement," referring to it as the "biggest arbitration in Spain."

He said Malaysia had broken the contract by failing to pay the cession money since 2013.

More on the claim by the Sulu heirs here.