Thursday, Oct 6, 2022
International Finance
Economy Featured

Malaysia’s Petronas to fight for seizure of Luxembourg assets

IFM_Petronas Malaysia-image
Malaysian Prime Minister Ismail Sabri Yaakob vowed to appeal the French court's decision.

Following the seizure of two of its companies in Luxembourg, the state-owned oil firm of Malaysia, Petronas, has declared it will defend its legal position.

As per reports from the Financial Times, which cited lawyers, the units were taken by the heirs of a deceased Sultan, intensifying a USD 15 billion court fight related to a contract that was signed 144 years ago.

Petronas reported on Tuesday that court bailiffs in Luxembourg served “Saisie-arret,” or a seizure order, on its Petronas Azerbaijan (Shah Deniz) and Petronas South Caucasus operations on Monday.

The action taken against it, according to Petronas, was “baseless.” It also stated that the units had previously sold their assets in Azerbaijan and had returned the proceeds.

The confiscation follows a French arbitration court decision in February requiring Malaysia to honour a contract the last sultan of Sulu made with a British trading company in 1848 regarding the use of his territory, which is now known as the Malaysian state of Sabah, by paying USD 14.9 billion to the heirs of the Sultan’s estate.

Following its separation from Britain, Malaysia took over the arrangement and began giving the heirs an annual token sum.

However, the payments were terminated in 2013, with Malaysia claiming that Sabah belonged to its territory and that no one else had any claim to it.

In March, Malaysian Prime Minister Ismail Sabri Yaakob vowed to appeal the French court’s decision and said that his country would not consider any rival claim to the state.

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