Petronas: Azerbaijan Asset Seizures Baseless, Legal Defense On Its Way

The national oil and gas company said that the actions taken against it as baseless and is working vigorously to defend its legal position on this matter

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Petroliam Nasional Bhd (Petronas) said that its two subsidiaries that had been seized in Azerbaijan – Petronas Azerbaijan (Shah Deniz) S.à r.l. and Petronas South Caucasus S.à r.l. – had divested its entire assets in the country.

In a statement issued late yesterday, the national oil and gas company also said that the proceeds from the exercise had been duly repatriated.

“We confirm that our two subsidiaries mentioned in the report have been served with ‘Saisie-arret’ on 11 July 2022,”

“Petronas views the actions taken against it as baseless and is working vigorously to defend its legal position on this matter,” the statement reads.

‘Saisie-arret’ means an act of seizure to obtain the total judgment/decision (award) of the arbitration.

Yesterday, Financial Times reported the seizure of two Petronas subsidiaries in Azerbaijan – by lawyers representing the heirs of the Sulu sultanate – reportedly worth more than USD2 billion (RM8.87 billion).

In March, an international court in Paris ruled that Malaysia had violated a treaty signed in 1878 and now will have to pay at least US$14.92 billion (RM62.59 billion) to the descendants of the Sulu sultan, almost 20 years after making the last payment to its heirs.

The treaty was signed on 22 January 1878 by Sultan Jamal Al Alam of Sulu with Baron de Overbeck and Alfred Dent of the British North Borneo Company that stipulates North Borneo (Sabah) was either ceded or leased (depending on the translation used) to the company in return for a yearly payment of 5,000 Malayan Dollar.

The government was ruled to violate the treaty after deciding to stop the Sulu sultan heirs’ annual RM5,300 cession money payment in 2013 following the Lahad Datu incursion.

Prime Minister Datuk Seri Ismail Sabri Yaakob had previously said that Malaysia had applied for the final award of RM62.59 billion given to a group claiming to be the heirs of the Sulu sultan to be cancelled.

The application was filed on 3 March in Paris’ Court of Appeals to nullify the decision, which was ruled by Spanish arbitrator Gonzalo Stampa.

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