There is a collateral issue arising from the Philippine claim to North Borneo, which Malaysia calls Sabah. That issue is whether it is the Philippines or the Sultanate of Sulu which has sovereignty over North Borneo.
Historical records indicate that North Borneo had been under the sovereignty of the Sultanate of Sulu since 1675. That sovereignty was recognized by Spain when the Philippines was under Spanish colonial authority, and by the United States when the Americans took over from the Spaniards.
From 1946 to 1963, the government of the United Kingdom viewed North Borneo as British territory and, therefore, under British sovereignty. That view regarding North Borneo is patently erroneous.
The historical record reveals that in 1878, a private British enterprise called the British North Borneo Company (BNBC) leased North Borneo from the Sultanate of Sulu. In 1946, the BNBC “sold” North Borneo to the British government.
Because the BNBC did not own North Borneo, the BNBC could not have validly “sold” North Borneo to the British government. That means the British government never validly acquired North Borneo.
Being so, the United Kingdom’s claim of sovereignty over North Borneo from 1946 up to 1963 (when the British government “donated” North Borneo to the Federation of Malaysia) is void from the very start.
Thus put, the assertion of sovereignty over North Borneo by the British (from 1946 to 1963) and by the Malaysians (from 1963 to the present) is void. Sovereignty over North Borneo had all along remained with the Sultanate of Sulu since 1675.
In 1962, the Sultanate of Sulu relinquished its sovereignty over North Borneo in favor of the Republic of the Philippines. This is embodied in an agreement signed by the heirs of the Sultan of Sulu and then Philippine President Diosdado Macapagal. The arrangement necessarily made the heirs of the Sultan citizens of the Philippines.
That agreement required the Philippine government to take over the claim of the heirs to North Borneo, and to press it in the international forum. If the Philippine government reneges on that deal, then sovereignty over North Borneo reverts to the heirs of the Sultan.
Under President Macapagal (1961-1965) and President Ferdinand Marcos (1965-1986), the Philippines actively pressed its claim to North Borneo (which was eventually called Sabah by Malaysia).
The Philippine claim to Sabah may have taken the backburner, so to speak, under Presidents Corazon Aquino, Fidel Ramos, Joseph Estrada and Gloria Macapagal-Arroyo, but in 2011, the Supreme Court of the Philippines declared that the Philippine government has never abandoned its claim to Sabah.
In other words, sovereignty over Sabah remains, as of this writing, with the Philippines, and not with the Sultanate of Sulu.
Sovereignty, however, should not be confused with ownership rights over real estate.
The term sovereignty refers to the supreme political authority exercised by a government, through its electorate, over a specific territory. Thus, the Philippine government, in trust for the Filipino people, retains its sovereign claim to Sabah.
In contrast, the legal ownership over the entire tract of land called Sabah belongs to the heirs of the Sultan of Sulu.
Thus, Sabah is Philippine territory subject to Philippine laws, but the real estate that is Sabah belongs to the said heirs.
It’s no different from a Filipino citizen who owns land in the Philippines. The land is under Philippine sovereignty, but the person who bought the land is its owner. The owner can exercise all acts of dominion over his land, subject to compliance with Philippine laws.
As owners of Sabah, the heirs have the right to enjoy the fruits of their ownership, including the recent arbitral award given to them by a Paris-based international arbitration tribunal.
Nonetheless, since sovereignty over Sabah remains with the Philippines, the rights of the heirs over Sabah are still subject to the Constitution and the laws of the Philippines, including laws imposing taxes on income, real estate and the like.