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THE recent legal wrangles involving the Malaysian Government and the heirs of the defunct Sultanate of Sulu involving arbitration of the Grant of 1878 is not the first attempt at arbitration made in an attempt to not only force a renegotiation of the Grant of 1878 but to change the terms and conditions of the grant.

After extensive research in the British Archives, we have discovered that at the end of the Second World War and on the 31st July 1946, the Law Offices of Adams Moses and Culver (AMC) of Chicago, United States of America sent a letter of reminder for the Termination of the Grant of 1878 to the solicitors of the British North Borneo Chartered Company in London.

They claimed that they had previously sent a letter of Termination of the Grant of 1878 dated 14th June 1946 to the North Borneo Chartered Company which was not replied to and that they represented Sultan Mohamad Amirul Ombra, who claimed to be the legal heir of the Sultanate of Sulu.

The Grant of 1878 was for the cessation of the territories between Sibuco and Pandasan in North Borneo, signed between the Sultan of Sulu, Baron Von Overbeck and Alfred Dent who were private businessmen.

This included all territories contained in the confirmatory deed of 22nd April 1903.

The letter to the Solicitors in London came after an announcement in the media on 17th July 1946 by the British government, that it had taken over North Borneo as a Crown Colony.

The Chartered Company had on 10th July 1946 received a payment from the British Government for £1.4 million and that it was a Crown Colony thereafter till the formation of Malaysia in 1963.

AMC demanded an official explanation for the “seizure” by the British Government, who in their opinion had been in open contravention of the rights of their clients by taking possession of North Borneo from the Chartered Company.

In their communications to the Chartered Company, AMC also stated that “……equitable considerations entitle(d) your first opportunity to negotiate for a new grant upon reasonable terms……(as) other groups are interested in acquiring North Borneo.” Their justification for the termination of the grant was because the ‘grantees’ (the Chartered Company) had abandoned the territory since 21st January 1936, and that the Grant of 1878 could be terminated by the ‘grantor’ (The Sulu Sultan), his legitimate heirs or legitimate successors, and that ‘substantial waste’ had been committed by the grantees, and that their actions had led to ‘irreparable damage’ to the granter’s heirs.

They further stated that the consideration (payment of cession) provided for in the Grant of 1878 was wholly “inadequate, inequitable, and insufficient to support a good consideration for said grant.”

The attorneys demanded for an “accounting of all natural resources removed and exported from the above-mentioned property since January 21, 1936, to this date, and payment for said natural resources removed and exported during said period.” Additional rental payments were also demanded for the period 21st January 1936 till 14th June 1946 for “fair and reasonable value of the use and occupation of said above property.” Messrs. Stephenson, Harwood and Tatham Solicitors, the legal representatives for the British North Borneo Chartered Company issued a reply to Messrs. Adams Moses and Culver Law Offices on 16th August 1946 from (representing the Chartered Company) in which they stated:

“We are instructed by our client company to repudiate expressly each and every of the grounds of the termination referred to, and every demand made, in the said notice and to inform you that your clients have no right whatever on the grounds set out in the notice or on any other grounds to terminate the grant in question. Accordingly, the notice of termination enclosed in your letter under reply is returned herewith.” “We are further instructed to advise you, for the information of your clients, that the Government of North Borneo has been authorized to make payment at Sandakan, North Borneo, of all outstanding Cession Monies to those who can show to the satisfaction of the said Government that they are legally entitled to receive the same.” The Chartered Company chose to ignore not only the notice of Termination of the Grant of 1878 but also refused to discuss arbitration which essentially is what the attorneys of the heirs to the Sulu Sultanate were demanding.

In the minds of the heirs to the Sulu Sultanate, they somehow still believed they had ownership over North Borneo, and that they could change the terms of the Grant of 1878 when in fact they had no right to terminate the Grant nor were there provisions for them to force a re-negotiation of the terms of the Grant. There were also no penalties for late payment of the yearly payments of cession. A similar agreement was signed with the Sultan of Brunei producing several grants in that arrangement in December 1877.

Their demands were ignored, and the Chartered Company merely offered to compensate them for outstanding payments due for the period September 1941 to September 1946. The Company took the view that this issue was not an issue of ‘sovereignty’ but rather an issue of ‘liability.’ This was the first attempt at an arbitration of the Grant of 1878 by the heirs of the Sulu Sultanate.

Historical Timeline

On the 29th December 1877 the Sultan of Brunei signed 4 grants that ceded to Baron de Overbeck and Alfred Dent his territory on the island of Borneo for a combined sum of $15,000.00 and all islands lying within nine miles of the coast thereof. Subsequently, on the 22nd January 1878, the Sultan of Sulu signed a grant that ceded to Baron de Overbeck and Alfred Dent his purported territory on the island of Borneo for $5,000.00 including all islands lying within nine miles of the coast thereof.

In a treaty signed in 1851, the Sultan of Sulu had further acknowledged the sovereignty of the Spanish Government over Sulu but any question as to the Sultan’s power to make a valid cession of the territories referred to above was answered subsequently by a protocol signed on behalf of the British, Spanish and German Governments in Madrid on 7th March 1885, in which the Spanish Government renounced all claims of sovereignty over “the territories of the continent of Borneo which belong or have belonged in the past either to the Sultan of Brunei or the Sultan of Sulu” and which formed the territories administered by the company styled the “British North Borneo Company”. Prior to the signing of this protocol, the rights of Baron de Overbeck and Alfred Dent under the cession Agreement had passed into the hands of the British North Borneo (Chartered) Company.

From 1881 to 1903, 22 more grants were signed between the British North Borneo Company and the family members of the Sultan of Brunei for other territories in North Borneo that belonged to them with a further yearly payment of an additional $5,460.00. Timeline of Sulu Sultanate rule 1878-1936

Sultan Mohamet Jamal Al Alam who signed the Grant of 1878 died in 1881 and was succeeded by his son Sultan Badaruddin, who then died in 1884. Between 1884 and 1886, when no Sultan was appointed or recognised, payments of the cession monies due under the Grant of 1878 was withheld until the appointment of a Sultan recognised by the Spanish Government in the Philippines.

The Spanish appointment as Sultan of Sulu, Datu Harun Al Rashid was very unpopular with members within the Sulu Sultanate and his appointment as Sultan of Sulu was a short one. Due to considerable public disorder and discontent, the Spanish Government replaced him with Jamalul Kiram, a brother of Sultan Badaruddin in 1894.

After this brief period of instability, all cession monies due were paid until the death of Sultan Jamalul Kiram in 1936.

However, on the 26th of August 1899, sovereignty over the Sultan’s territories was passed into the hands of the government of the United States of America from Spanish rule after Brigadier General John C. Bates concluded the Spanish Treaty of Peace in 1878 a treaty with Sultan Jamalul Kiram. In 1903, Sultan Jamalul Kiram signed a Deed of Confirmation setting out the names of the islands ceded under the Concession Agreement of 1878. Under this deed, the North Borneo (Chartered) Company paid the Sultan a further $3,200 and thereafter, an additional $300 per annum.

By 1915, the Sultan of Sulu was relieved of all his ‘temporal powers,’ retaining only the empty title of Sultan of Sulu and certain religious powers. On the 18th of November 1919, Sultan Jamalul Kiram signed a will or a grant of probate. In 1935, the Commonwealth of the Philippines was established with U.S. approval and when Sultan Jamalul Kiram died on the 7th June 1936, the Philippine Government decided not to recognise the existence of the role of the Sulu Sultanate any longer.

This meant that the Government of the Philippines Islands would no longer recognize the title of ‘Sultan’ or attribute such a title recognized by the people of Sulu as a Sultan or any of the attenuated prerogatives enjoyed by the late Sultan Jamalul Kiram.

The death of Sultan Jamalul Kiram and the confusion of who is sultan next

In 1936, following the death of Sultan Jamalul Kiram, the question of a successor or heir to the sultan proved to be an annoyance to the chartered company as they were unsure who to pay the cession payments to as Sultan Jamalul Kiram had no children. However, two individuals wrote to the Chartered Company in Sandakan in a short space of time claiming to have been elected as Sultan of Sulu by their followers. One individual was Datu Raja Muda whilst the other was Mohamad Amirul Ombra.

In a Letter of Administration granted on the 2nd April 1937 by the Court of First Instance of Sulu, 9th Judicial District, the estate of Sultan Jamalul Kiram was granted to Hajjah Dayang Piandao, daughter of Sultan Badaruddin.

So, whilst these two men claimed to have been appointed the rightful Sultan of Sulu, a court in Sulu had recognized Hajjah Dayang Piandao as the rightful heir to the cession money and not them.

However, on the 11th October 1939, a of Letter of Administration was granted by the Sandakan Sessions Court to Datu Punjungan Kiram, in respect of the estate of one of Datu Raja Muda who had died on 21st September 1936. This explains why the Chartered Company were confused who was the rightful heir in 1936 as there were overlapping claims from three different individuals to the cession monies and a dilemma of who to pay.

The matter of outstanding monies due to Hajjah Dayang Piandao was taken to court and in a judgement on the 18th December 1939 by the High Court of the State of North Borneo, it ruled that as the Sultanate of Sulu was no longer recognised by the Philippine Government and that it therefore ceased to exist, and as such, all cession monies due under the Grant of 1878 should be paid to the heirs of the late Sultan Jamalul Kiram as there could be no “successors” to the late Sultan. The court recognized the claim by Hajjah Dayang Piandao and her relatives and so ordered the Chartered Company to release payment to them at the earliest opportunity in Sandakan.

Chartered Company records show that all outstanding sums due to the heirs was indeed paid for the period June 1936 to 23rd September 1939 and so it would seem they (the heirs) were attempting to demand additional cessation monies be paid for the same period of time they had already been paid for in person in Sandakan in 1939 after the court ruling.

However, the name of Sultan Amirul Ombra was missing from the list of plaintiffs in the court case against the Chartered Company, so it came as a surprise that he (Sultan Amirul Ombra) was suddenly a party to the 1946 letter of Termination of the Grant of 1878.

Outstanding dues to the heirs of Sulu Sultanate post World War Two

At the end of the Second World War, in the Chartered Company records, a total sum of $25,000 would have been due for payment to the claimants in September 1946.

Cession payments did stop from 1942 till 1946 due to the Japanese occupation of North Borneo which made it impossible for payments to be made during that period.

In Chartered Company communications with the British Government, arrangements were being made in June 1946 for the payments to be released to Dayang Hajjah Piandao and the heirs but there was a delay in deciding the currency of payment to be used for cession payments when the notice of Termination of Grant of 1878 was suddenly received by their solicitors in London.

North Borneo is officially a British Crown Colony

In the agreement signed on the 26th June, 1946 for the transfer of ownership of North Borneo from the Chartered Company to the British Crown states that “between HIS MAJESTY’S SECRETARY OF STATE FOR THE COLONIES on behalf of His Majesty (hereinafter referred to as “the Crown”) of the one part; and the BRITISH NORTH BORNEO COMPANY, incorporated by Royal Charter dated the first day of November, 1881, whose offices are situated at 80/82, High Street, Rickmansworth, in the County of Herthfordshire (hereinafter referred to as “the Company” which expression shall be deemed to include the Company’s successors and assigns) of the other part.”

North Borneo was ceded to the Crown Colony on 15 July 1946 shortly after the dissolution of the British Military Administration. It was succeeded as the state of Sabah through the formation of the Federation of Malaysia on 16 September 1963.

On 16 October 1947, seven of the British-controlled islands in north-eastern Borneo named Turtle Islands, together with the Mangsee Islands, were ceded to the Philippine government under a past treaty signed between the United Kingdom and the United States. The claim by the Government of the Philippines to a portion of North Borneo or Sabah has attracted more notoriety than serious attention outside of those islands. This is, probably, because the air of political improvisation and private greed which has surrounded the claim over Sabah and its subsequent urging, has tended to distract from its justifiable features.

The question of sovereignty over North Borneo and all the islands mentioned in the confirmatory deed has been the subject of an agreement between the British and American Governments, but it is unnecessary to consider this confirmatory deed further since the Government of North Borneo did not contest their ‘liability’ to pay the sum to the heirs or successors of the Sultan.

And so ended the first arbitration of the Grants of Cession in 1946 with the British Crown Colony and the Chartered Company refusing to acknowledge anything other than liability of payment due to the heirs.

It was never an issue of sovereignty.

- Both Shari and Avtar are passionate about Sabah’s history.