Sulu Arbitration

Now Malaysia still had to deploy this absurd ruling to get the Arbitration stopped or discredited. They had a weak judgement from the court that their selection process of two years before was annulled. The judges did NOT however tell the Arbitrator, Dr Stampa, that he should stop. He had already done all the work.

And most importantly, Stampa didn’t work for the judges, and wasn’t even a party to the court case that came up with this ludicrous story. So, the judges didn’t tell him to do anything.

So, the Malaysians could – and should – have taken their argument to court under the Spanish Arbitration Act, saying “as the selection out of a hat process was communicated to the Malaysian Government through the wrong Embassy, we must now say that the Arbitrator doesn’t exist”. They could have taken Stampa to court, they could have taken us to court, but that would expose this charade to the kind of scrutiny that they have been avoiding at all costs. They would have lost, badly.

So, they asked the court clerk (a Letrado or Letrada) to write on headed paper directly to Stampa, with an instruction that he should stop work. It was a pretty incompetent piece of fake law. To be clear, they didn’t file the request so anyone could see it, but he later admitted to an investigating judge what he had done, and who had asked him to do it. Luckily for him, the investigating judge (who was trying to build a case against Stampa) seemingly decided this didn’t matter.

Meanwhile, Stampa called an emergency hearing, which Malaysia again declined to attend. Our lawyers urged Stampa to continue, but he declined, stating that the situation in Spain, while unprecedented, forced him to stay proceedings until the parties could further clarify the implications of the TSJM’s vacatur decision.

Transfer to France

As of July 2021, the arbitration was in suspended animation. Stampa presumably had already written much of the Final Award, since he was due to deliver it at the beginning of September. But after he stayed proceedings, the Award might never come out – which was exactly the outcome Malaysia had been looking for.

At some point in that time period, someone on our lawyers’ team came up with a clever workaround: what if Stampa moved the locus of the arbitration out of Spain? Remember that most modern contracts specify where an arbitration is going to be held; that location (known as the “seat” in arbitration language) determines which courts can supervise and pronounce on the integrity of an arbitration proceeding. The agreement of 1878 had no such information about a seat. Stampa had opted for Madrid, since it’s where he was based.

(But there is precedent in difficult arbitrations for moving a seat from one place to another – even where the parties had previously agreed, in their contract or otherwise, to fix it in a particular place. The most notorious case involved a claim seated in Jakarta, where the Indonesian government intervened to stop one of the arbitrators from traveling to a hearing. The other two arbitrators moved the seat of their own accord from Jakarta to the Hague and issued the award there.)

But our lawyers had to persuade Stampa that there was a viable seat elsewhere. They looked to France. In order to convince Stampa that this was not an idle suggestion, they took his decision on jurisdiction and had it imported into France via a procedure to recognize foreign decisions called an exequatur.

The exequatur application succeeded in September 2021. Our lawyers then wrote to Stampa in October 2021 – copying Malaysia’s Attorney-General and thus making Malaysia aware of the exequatur. Our lawyers asked Stampa to move the seat of the arbitration to France, enabling him to continue without the ambiguity of the Spanish court extraordinary vacatur proceeding hanging over his head. Stampa, as usual, invited comment from Malaysia and, as usual, received none.

Stampa duly moved the seat in late October 2021, though he didn’t physically move to France (the seat is a legal fiction that doesn’t require a physical analogue.) Stampa cited the “unprecedented interference” of Spanish courts in an ongoing proceeding, which he suggested (correctly, as far as we can tell from reading an English translation of it) was in violation of the Spanish Arbitration Act.

Those provisions permitted a court only to: appoint an arbitrator; assist with evidence, or; confirm, deny confirmation of, or annul an Award. Reversing an arbitrator’s appointment process was most definitely not on the list. You can find the English translation of the Spanish Arbitration Act here. The relevant Articles are 6 and 7.

Stampa undertook to issue his Final Award by March 2, 2022.

Getting Personal

Of course, that wasn’t the end of Stampa’s harassment at the hands of cronies acting on Malaysia’s behalf. Indeed, his troubles were only beginning. Towards the end of 2021, Stampa received letters from a lawyer at the French firm Bredin Prat. The lawyer told Stampa that, if he didn’t immediately cease work on the arbitration, he would be subject to criminal prosecution. Stampa ignored him but reported the contact to Malaysia and us.

In December 2021, Malaysia’s Ambassador to Spain lodged a criminal complaint with the Spanish Prosecutor. The complaint accused Stampa of the Spanish equivalent of contempt of court, as well as assuming an office he had no right to – the “office” being his role as an arbitrator.

Critically, he hadn’t disobeyed a “court”, he had ignored a court official who said he was acting for the other side!

Stampa issued his Final Award on February 28, 2022, a few days ahead of schedule.

The Final Award held that the agreement of 1878 was indeed a lease, but that – contrary to Malaysia’s subsequent protestations – there was nothing the claimants could do by way of reclaiming the territory. Instead, Stampa awarded the claimants damages of almost $15 billion, reflecting 15% of the value of the oil and gas in the territory discovered and anticipated to be exploited from 2013 – 2044.

Issuing the Final Award was a brave or foolhardy move, depending on your perspective. Certainly, Stampa continues to pay for his decision – having been prosecuted and, in December 2023, convicted for having the temerity to complete the terms of his appointment – to the displeasure of a vengeful Government.

That Government is no Banana Republic: it is Spain, a paid-up member of the EU and NATO since 1986. But beneath the veneer of first-world cosmopolitanism, there clearly lurks an unreconstructed gangster mentality among the judiciary, the Bar, and the export industries that can manipulate the Foreign Ministry. The rule of law is for those who play the dirty game; those who do not – such as Stampa – will find their freedom curtailed and their reputation in tatters.

Recently Malaysia declared that one of the claimants was a terrorist, alleging that he was indeed involved in Lahad Datu. Tellingly, Malaysia had never made any such claim in the previous 10 years, though it had plenty of time to identify those associated with the incursion. Equally notably, Malaysia has yet to publish any evidence to substantiate its terrorism allegation, or to communicate data with its real international partners against real terrorists.

In somewhat similar vein, in May 2023 the Chief of Police accused all the claimants of “sabotage” and being a threat to national security. The crime? Making a legal claim against Malaysia. So apparently, as far as Malaysia is concerned, it’s a crime to even bring a claim against the state, just as in Spain it seems to be a crime to arbitrate any such claim. So much for international accountability.

Malaysia has indeed launched a challenge to the Final Award in France, the new seat. That challenge is pending. The TSJM could not entertain any such challenge – let alone a declaration of invalidity – because Spain was not the seat for the Final Award.

As for the Preliminary Award, the proper way to invalidate that again was through a challenge procedure under Article 42 of the Spanish Arbitration Act – precisely the procedure that Malaysia had launched in October 2020, that the court clerk had dismissed from the docket in September 2021, and that Malaysia had failed in timely fashion to resurrect.

We are told that Malaysia’s Ambassador to Spain never sent the December 1 TSJM judgment to the Spanish prosecutor. (To remind you, this judgment stated that Stampa was unassailably the Arbitrator, and upheld his Preliminary Award, making a nonsense of the subsequent prosecution of Stampa for ignoring a court clerk’s demand that he stands down! Malaysia repeatedly pretends this judgment didn’t happen). This suggestion sounds absurd and would be probably criminal if true. However, take a look at the e -Book that the Prime Minister, Minister and Malaysian Government signed off in February 2024. It carefully cuts out this entire judgment!

In summary, Stampa was accused of disobeying judges who had never actually contacted him, never told him he was disobedient, never threatened or brought a case against him. And by the time he had been dragged to court in 2023 it was a year after those same judges had, almost a year earlier, confirmed that he and his arbitration Award were valid and could not be undone. When judge Santos Vijande wrote a blistering attack as part of that judgment, he described the Malaysian case as procedural fraud. One wonders how the TSJM judges felt when Stampa – as an extension of the same procedural fraud – was convicted of disobeying them?

Stampa was convicted in December 2023 and sentenced to a suspended sentence of two years. His reputation was hammered by Malaysia through their PR goons. The goal? To influence French judges and the judges in other jurisdictions against the protection and enforcement of this Arbitration.