(Reuters) – Malaysia’s state-owned oil company Petronas said on Tuesday it would defend its legal position after two of its Luxembourg subsidiaries were seized.
The units were seized by descendants of a late sultan, aggravating a $15 billion legal dispute over a deal signed 144 years ago, the Financial Times reported earlier, citing lawyers.
The company said its Petronas Azerbaijan (Shah Deniz) and Petronas South Caucasus units were served with “Saisie-arret” on Monday, essentially a seizure order by Luxembourg bailiffs.
Petronas said the action taken against it was “baseless”. He added that the units had previously disposed of their assets in Azerbaijan with proceeds already repatriated.
The seizure follows a decision by a French arbitration tribunal in February ordering Malaysia to pay $14.9 billion to the heirs of the last Sultan of Sulu, to honor an agreement he signed in 1848 with a trading company British over the use of its territory, now known as the Malay State of Sabah.
Malaysia took over the arrangement after independence from Britain, paying a token sum to heirs each year.
But the payments were stopped in 2013, with Malaysia arguing that no one else had a claim on Sabah, which was part of its territory.
Malaysian Prime Minister Ismail Sabri Yaakob pledged in March to fight the French court’s ruling, saying his government would not accept anyone else’s claim on the state.
(Reporting by Savyata Mishra in Bengaluru and Rozanna Latiff in Kuala Lumpur; Editing by Anil D’Silva and Ed Davies)