What is contained in the French arbitral award that directed Malaysia to compensate $14.9 billion to the Sulu Sultanate may tip the balance on the epic friction between the Philippines and Malaysia over Sabah and the government should take a serious look into it.
Former Defense Secretary Gilbert Teodoro said details of the arbitral award may be crucial in establishing the nature of the 1878 contract among Sulu Sultan Jamal Al Alam, British government representative Baron de Overbeck and the British North Borneo Company’s Alfred Dent.
“If the award classified the contract as a lease between two parties, the landlord and the tenant, it will strengthen the position of the country regarding its claim over Sabah,” he indicated.
Teodoro dissected the difference in the classification of the agreement between the Malaysian and the British interpretation of the keyword “Pajak” in the contract written in Arabic as cession as opposed to the assertion of the Sultanate and the Philippines that it is a lease.
Teodoro, who is a lawyer, said he had encountered treaties that involved cession payments but these have a definite period, which will make the contract on Sabah unique since it appears to be a perpetual payment.
He cited as an example the British lease from China of Hong Kong that lasted for 99 years.
The word cession was used in the contract but the payment was terminated in 1997.
The amount is negligible, however, as it was diluted through the years in terms of the currency used, from the original 5,300 Mexican dollars or about P3 million compared to its diminished value of P5,300 Malaysian ringgit or P63,600 a year which, according to a member of the Sultanate is even lower than the Philippine minimum wage.
The amount is inconsequential but the practice of annual remittance to the Sultanate symbolizes Malaysia’s recognition of its right over Sabah.
Kuala Lumpur stopped the yearly compensation after the 2013 Lahad Datu incursion of the followers of the Sultanate, triggering the Sulu Royal family’s filing of a complaint with the international tribunal, which subsequently ruled that there was a breach of the agreement.
The question of the nature of the contract was brought to focus in 1963 when the Federation of Malaya or Malaysia was formed in which North Borneo including Sabah was annexed.
In 1962, the Philippines gave notice to Malaysia that it will not agree to Sabah being included in the newly-formed nation. The leaders of Malaysia, the Philippines, and Indonesia agreed then to settle the issue through the international court.
Consistently, Malaysia refused arbitration, Teodoro explained.
The decision of the international court thus becomes pivotal as it will provide international legal recognition of the real intent of the parties who signed the Sabah deal more than a century ago.