- Arbitral Award
- Ad hoc Arbitration - Preliminary Award
- Nurhima Kiram Fornan et al. v. Malaysia
LONG-TERM CONTRACTS - LEASE CONTRACT - BETWEEN SOME MALAYSIAN INDIVIDUALS AND THE MALAYSIAN GOVERNMENT - CONTRACT SILENT AS TO THE APPLICABLE LAW - ARBITRAL TRIBUNAL APPLIED THE UNIDROIT PRINCIPLES AS THE MOST APPROPRIATE RULES DEFINED AS "GENERALLY ACCEPTED PRINCIPLES AND RULES OF INTERNATIONAL COMMERCIAL LAW", WHOSE APPLICATION MAY AVOID OR, AT LEAST, CONSIDERABLY REDUCE THE UNCERTAINTY ACCOMPANYING VAGUE CONCEPTS FOR THE DETERMINATION OR TERMS SUCH AS «GENERAL PRINCIPLES OF LAW» OR «USAGES AND CUSTOMS OF INTERNATIONAL TRADE»
The arbitration concerns a dispute which arose between Claimants, some Philippine nationals, and Respondent, the Government of Malaysia, on the legal characterization and enforcement of an instrument over a portion of territory along the North Coast of Borneo –known today as Sabah, Malaysia- concluded on January 4, 1878, between the Sultan of Sulu and North Borneo, on the one hand, and a representative of the British Government, on the other [hereinafter the 1878 Agreement]. Claimants are direct descendants and legal heirs of the Sultan and successor-in-title of the signatory of the 1878 Agreement, while Respondent became the successor-in-title of the British North Borneo Company upon the establishment of its Federation in 1963.
Claimants characterised the 1878 Agreement as a commercial transaction, a leasing agreement of certain territory along the North Coast of Borneo, constituted for an undetermined period with Malaysia and in return of a series of annual rental payments. On this basis, Claimants complained that Malaysia has incurred in a fundamental breach of its essential payment obligations under the terms of the 1878 Agreement. Claimants seek, as main remedy, the termination of the 1878 Agreement pursuant to Article 7.3.1 of the UNIDROIT Principles.
In the Preliminary Award, the Arbitral Tribunal decided that Claimants’ plead on the application of the UNIDROIT Principles as the lex causæ of the arbitration was well founded.
In defining the UNIDROIT Principles as "generally accepted principles and rules of international commercial law", it affirmed that "the reference to a systematic and well–defined set of rules as is the UNIDROIT Principles may avoid or, at least, considerably reduce the uncertainty accompanying vague concepts for the determination or terms such as «general principles of law» or «usages and customs of international trade»". Therefore, the Arbitrator applied the UNIDROIT Principles of International Commercial Contracts as amended in 2016.
Fulltex available at https://jusmundi.com}}