On 14th March 2013, we received a question from Mr Peter Lau Hui Han, today we ANSWER:
So is the agreement with the sulu sultanate a lease or cession agreement? Why are we still paying annually
  1. Our reply to your first question is based on the translated version of the 1878 Agreement as posted below and based on the assumption that the translation is correct and that the said Agreement is valid and enforceable.527754_10151784652349942_1783601833_n

    We wish to highlight that in the first paragraph of the Agreement, we quote: “… grant and cede of our own free and sovereign will to Gustavus Baron de Overbeck of Hong Kong and Alfred Dent Esquire of London as representatives of a British Company co jointly their heirs associates successors and assigns forever and in perpetuity all the rights and powers belonging to us over all the territories and lands being tritutary to us…”

    Literal interpretation on the quote above and the other provisions of the Agreement shows that the Sulu Sultanate has assigned all rights belonged to the North Borneo Company in consideration for $5,000 by this Agreement.

    Secondly, people of Sabah have voted to join Malaysia as evidenced in the 1962 Referendum by Cobbold Commission.

    Thirdly, International Court of Justice has recognized the rights and sovereignty of Malaysia over the state of Sabah in its decision on the territorial dispute between Government of Malaysia and Indonesia over the islands of Ligitan and Sipadan. You may check out the judgment here: http://www.icj-cij.org/docket/files/102/7714.pdf

  2. The second question is related to the first question, which is “if the Agreement is a Cession Agreement, why Malaysia is still paying annually.” We wish to state that based on the Agreement, Malaysia as a successor of North Borneo Company shall honor the Agreement by paying the monies provided always that this Agreement is still a valid document binding upon the successors or heirs.

    The validity of this Agreement shall be determined considering any documentary evidence signed between Malaysia and Philippines, both State Practice on the existence of Sulu Sultanate, general principles of laws and any opinions from the imminent international law scholars.

    Furthermore, one shall consider the sovereignty of Malaysia, diplomatic ties between Philippine and Malaysia, legal recognition of Sulu Sultanate by the Philippines government and any other principles of public international laws.

    We note both questions involve public international laws and issues. We stress that our view shall not be interpreted to have entrenched effects as a premise or stance for any other further proposition. After all, this is more political than legal and we have limited information to make any good judgment.