Filipino Sulu Heirs Demand $15B from Malaysia in Global Legal Battle Over Colonial-Era Sabah Land Deal

The descendants of the historic Sultanate of Sulu, part of the Philippines, are pressing forward with a $15 billion international arbitration claim against the Malaysian government over unpaid compensation linked to an 1878 lease agreement for the territory of Sabah, a Malaysian state on the island of Borneo.

The dispute originates from a colonial-era deal in which the Sultan of Sulu leased parts of northern Borneo to a British company. Malaysia inherited the arrangement and paid a nominal annual rent to the heirs until 2013, when payments were halted following a violent standoff in Lahad Datu, Sabah.

In response, the heirs initiated arbitration proceedings in Europe, claiming breach of contract and seeking reparations. A Spanish arbitrator awarded them nearly $15 billion in 2022, prompting enforcement actions across jurisdictions including France, Luxembourg, and the Netherlands.

One of the most prominent actions came in July 2022, when the heirs sought to seize assets of Petronas, Malaysia’s state-owned energy giant, in Luxembourg. Though courts have issued varying decisions on jurisdictional grounds, the case continues to gain international attention for its legal, political, and historical complexity.

Malaysia has vigorously contested the arbitration process, arguing that the award was illegitimate and that the arbitrator overstepped jurisdiction. Several European courts are still deliberating on the matter.

The Sultanate of Sulu, once a powerful maritime kingdom stretching from the southern Philippines to parts of Borneo, has long faded from the geopolitical stage. However, this legal case has revived global interest in its legacy, the validity of colonial-era agreements, and the broader implications for post-colonial restitution claims.

Experts say the outcome could set precedents for how modern governments deal with historical contracts involving indigenous sovereigns. Meanwhile, Philippine lawmakers and civil society groups are closely watching the proceedings, citing implications for regional autonomy and historical justice.

The legal teams representing the Sulu heirs have expressed their intent to continue pursuing enforcement of the award in various international jurisdictions. Further developments are expected as rulings from a French  court are anticipated in the coming months.