😎 Heirs of the Sultan of Sulu (PETRONAS) or how an 1878 concession nearly seized the assets of an oil giant? 😎

THE SETTING

Malaysia, the state of Sabah in northern Borneo - oil-rich. State oil giant Petronas.

THE INSTRUMENT

• an arbitration award built on a colonial treaty from 1878.
• in 1878 the Sultan of Sulu leased the territory (present-day Sabah) to a British trading company in exchange for annual payments.
• after independence, Malaysia kept paying the heirs a symbolic token - until it stopped in 2013.

WHO HOLDS IT?

8 Filipino heirs of the last Sultan of Sulu.
behind them - London litigation fund Therium, which sank tens of millions into the claim.

THE MECHANICS

the heirs launched an arbitration, and in February 2022 Spanish arbitrator Gonzalo Stampa issued a $14.92B award - the second-largest arbitration award in history (the heirs originally demanded $32.2B, and the process itself cost over $20M - lawyers and researchers across 8 jurisdictions).

under the UN New York Convention, the award became enforceable worldwide - even while Malaysia was contesting it at home.

the heirs went after Petronas assets abroad - because Petronas, as a state company, was treated as an "extension" of the state.

WHO STUMBLED?
Petronas / Malaysia.

at the peak of the threat, bailiffs in Luxembourg were walking into banks with account-freeze orders - a 19th-century colonial paper was genuinely putting the assets of a modern oil giant at risk.

HOW DID THEY GET OUT?
through the courts of the seat of arbitration.

• the Paris Court of Appeal annulled the award (2023, final - December 9, 2025: the arbitration clause "inapplicable," the reference to the British Consul-General of Borneo vanished back in 1963).

• the Hague Court of Appeal refused enforcement (upheld by the Dutch Supreme Court on September 6, 2024). Stampa was found criminally liable in Spain in December 2023.

• as of 2026 the heirs have essentially lost, and Petronas is litigating against the Therium fund in Jersey.

WHAT'S THE TAKEAWAY FROM THIS CASE?

in essence - this case shows the limit of the lever.
an arbitration award born from a colonial concession is one of the most powerful instruments out there (global enforceability under the UN convention), surviving 144 years and a change of sovereignty.

• but the lever only worked as long as it held up procedurally. once the courts of the seat knocked out the foundation - the gate collapsed.

unlike Gertler's royalties or the Franco-Nevada stream (which we'll cover in the next episode), which sit on the title of the asset itself, an arbitration lives exactly until its first successful annulment (fragility).

😎😎😎😎