Summary

In re Ex Parte Application of Petronas Azerbaijan (Shah Deniz) S.à r.l. and Petronas South Caucasus S.à r.l., pursuant to 28 U.S.C. § 1782 to Conduct Discovery for Use in Foreign Proceedings

INTRODUCTION

Petitioners' Application arises from efforts to enforce unlawfully obtained arbitration awards (the "Purported Awards") rendered against the government of Malaysia. The underlying arbitration (the "Arbitration"), tied to a long-standing territorial dispute involving certain purported descendants of the former regional sultanate (the Sultanate of Sulu) (the "Sulu Claimants"), has been controversial from inception to its shocking conclusion. The highly irregular, and recently vacated, final award in the Arbitration (the "Final Award"), was issued by a private Spanish commercial arbitrator even though his appointment was annulled by the same Spanish Court that appointed him. Notwithstanding that annulment, the arbitrator purported to move the seat of the Arbitration from Madrid to Paris where he--without any legal authority-- issued the now vacated Final Award.

Petitioners, non-parties to the Arbitration, have incurred, and continue to incur, significant damages in seeking to set aside certain attachments that have been improperly levied over their bank accounts in connection with efforts to enforce the Purported Awards, which the Sulu Claimants threaten to pursue against the worldwide assets of the corporate group of which Petitioners are members, Petroliam Nasional Berhad ("Petronas"), a global Malaysian energy corporation.

The Sulu Claimants have persisted in their efforts to enforce the Purported Awards, despite the fact that the arbitrator ...

Petitioners have commenced proceedings in Jersey and intend to use the discovery sought here to aid those proceedings. Specifically, Petitioners have commenced civil proceedings in Jersey (the "Jersey Proceedings") against: (i) certain entities that were involved in funding the Sulu Claimants in the Arbitration (as defined below) and the enforcement proceedings in Luxembourg, which include Therium Group Holdings Limited ("Therium Holdings"), Therium Capital Management Limited ("Therium Capital"), and Therium Litigation Finance Atlas AFP IC ("Therium Atlas AFP") (a special purpose vehicle within the Therium group of companies (the "Therium Group") that disbursed funds in relation to the Arbitration); (ii) certain lawyers who acted for the Sulu Claimants, ...; and (iii) the Sulu Claimants (collectively, the "Jersey Defendants"). In the Jersey Proceedings, Petitioners plead that, notwithstanding the clear legal effects of the June 29, 2021 Judgment and the July 2021 Injunctions (as defined below), each of the Jersey Defendants combined to use unlawful means to, among other things, procure the purported continuation and reseating of the Arbitration in order to secure the Final Award, and thereafter enforce the Purported Awards against Petitioners in Luxembourg thereby causing loss and damage to Petitioners.

Petitioners therefore seek, inter alia, damages for such injury as well as permanent injunctive relief preventing the Jersey Defendants from taking any steps to enforce (or procure any other persons to enforce) the Purported Awards.

...

FACTUAL BACKGROUND

I. HISTORICAL AND FACTUAL BACKGROUND

The underlying dispute concerns a 19th century agreement relating to certain Malaysian sovereign territory located on the North Coast of Borneo, Malaysia (the "Territory" or "Sabah").

On January 4, 1878, Sultan Mohammed Jamulul Alam (the "Sultan of Sulu") entered into an agreement with Messrs. Alfred Dent and Baron Gustavus de Overbeck ("Dent and Overbeck") for the cession of the Territory ("1878 Agreement"). Pursuant to the 1878 Agreement, Dent and Overbeck were required to make an annual payment to the Sultan of Sulu equivalent to 5,000 Malaysian Ringgit (approximately US$1,050 based on the exchange rate on May 14, 2024).

...

This is the sixth application pursuant to 28 U.S.C. § 1782 filed by Petitioners in relation to the Spanish and Luxembourg Proceedings (as defined herein) and the third application made in connection with the Jersey Proceedings (as defined herein). Two of the prior applications made in connection with the Spanish and Luxembourg Proceedings were filed in and granted by the United States District Court for the Southern District of New York.