Media Coverage
Source: Law360
Media Coverage
Press Contacts: Erik Cummins, Matt Hyams, Taina Rosa, Olivia Thomas
08.26.24
A few years ago, the heirs of the former Sultan of Sulu initiated an ad hoc arbitration against Malaysia for non-payment of rents allegedly due under a 150-year-old agreement. Malaysia did not participate in the arbitration, and the proceedings were plagued with numerous procedural irregularities. The Spanish court who appointed the arbitrator Gonzalo Stampa vacated Stampa’s appointment midway through, leading Stampa to move the arbitration from Spain to France. He then issued a $14.9 billion award against Malaysia, believed to be the second largest arbitral award ever.
The Paris Court of Appeals ultimately struck down the award, but that did not stop the heirs from attempting multiple enforcement bids throughout Europe. Because he did not step down after the revocation of his appointment, Stampa was convicted of contempt by the Spanish courts and sentenced to six-months in prison and a one-year ban on practicing as an arbitrator.
In an interview with Law360, special counsel Rafael Boza and senior associate Gary Shaw said the case is “peculiar and in fact, unique”—specifically noting the criminal conviction.
“One of these unique features was the dispute resolution clause, which was signed in an 1878 agreement, signed by different parties under very different circumstances,” they said. “Arguably, the clause is impossible to perform today.”
Boza and Shaw added that the enforcement status of the award is still unclear.
“As the claimants continue to try to enforce the award across various jurisdictions, Malaysia's defenses and actions to thwart enforcement will be of interest,” they said. “Malaysia has been successful in challenging the enforcement of the award, obtaining favorable rulings in French, Dutch and Luxemburg courts. Also of interest will be Malaysia's attempts to annul the award.”
“Finally, the developments of the situation of Mr. Stampa will be of great interest as he may continue to challenge his contempt of court conviction,” they concluded.
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