Trade tensions between the European Union and the United States are now compounded by trade tensions with Southeast Asia, a growing region. The EU’s policies that are supposed to protect the environment, but in fact amount to neo-European protectionism, are the main reason for this.
In particular, new European regulations on deforestation, which impose new and stricter requirements for forest protection, have angered the economies ofSoutheast AsiaLike the Malaysia and Indonesia. On the top European Union and ASEAN December, Indonesian President Jokowi He criticized the EU, warning that it should not try to impose its standards on the ASEAN trading bloc if it wants to maintain relations with Indonesia in the future. Tensions escalated further in January when Malaysia warned it might stop exporting palm oil to the European Union, in retaliation for new EU rules on deforestation.
Despite this, the EU still aims to conclude a comprehensive trade agreement with Indonesia, although the EU ambassador, Vincent Beckett, we must admit: “We have a lot to explain to the media and officials” in Southeast Asia. The UK’s approach of not trying to export its bases to other jurisdictions and of requiring that imported products comply with local law, in order to avoid trade tensions, is evident.
While the EU’s trade with China may be threatened by the process of “decoupling” in the aftermath of the war in Ukraine, it is unfortunate that the EU’s regulatory zeal is undermining prospects for expanding trade with the promising markets of Southeast Asia.
An international legal battle spoils relations
Another major source of tension between the EU and Southeast Asia is the international legal battle over control of Malaysia’s oil and gas resources. This issue has not received much attention in the European political debate, despite the EU’s frantic efforts to replace Russian energy.
The legal dispute arose from the 1878 agreement granted British North Borneo Company Reach a territory that is now part of Malaysia, known as Sabah. Under this agreement, the local sultans allowed the Britons to “benefit” from minerals, forest products, and animals in exchange for an annual rent.
Later, Sabah was included in the new state of Malaysia, which was founded in 1963. For decades, various Malaysian governments paid this rent to the Sultan’s heirs.
In 2013, Malaysia halted the payments after the armed incursion into Lahad Datu led by supporters of the late The honorable beauty IIIwho claimed to be the Sultan of Sulu, in their efforts to claim eastern Sabah.
In February 2021, a French arbitration court ruled $14.9 billion to these heirs. Malaysia lost. After the French arbitration award, two subsidiaries of Petronas, the Malaysian state-owned oil company, was seized in Luxembourg. Sabah has great oil and gas resources, which gives it great economic importance. However, a French court suspended the execution of the ruling until the end of the appeal, which is still pending.
The Supreme Court of Malaysia ruled in Sabah Fpetron in March 2020 that Malaysia is the appropriate place to resolve disputes arising from the 1878 Convention, thus challenging the jurisdiction of non-Malaysian courts.
Conflict of interest?
The decision was made by the Spanish referee Gonzalo Stampa, which was originally appointed by a Spanish court. According to an expert analysis published by the Institute for Transnational Arbitration, he conducted “an arbitration that some would describe as completely misleading.” It notes that its decision to adjudicate in favor of the plaintiffs was taken “in the context of a hotly contested private arbitration, in which neither the parties nor the venue courts accepted the purported arbitration clause nor the conduct of the proceedings, Spain. A polarizing decision in the end.”
The Malaysian government has reportedly filed criminal charges against Mr Stampa, who appears to have close ties to the Spanish law firm B. Cremades & Asociados, which is representing the plaintiffs in the case. According to Stampa himself in a 2015 interview, he has a close and longstanding relationship with the company’s founder, Prof. Bernado m. creamadis, who received him as soon as he finished his studies in law. He worked with Cremades for thirteen years, learning everything he knew about arbitration from them, before starting his own firm. “I have nothing but gratitude for him,” said Mr. Stampa. During this period Mr. Stampa co-authored with Mr. Karimadis a book published in 1994 entitled Commercial Arbitration in Spain History and current legislation.
In November 2021, a month after Mr. Stampa moved the seat of arbitration from Madrid to Paris, following the annulment of his appointment by the High Court of Justice of Madrid, Mr. Stampa and Mr. Karimadis participated as speakers in the same legal field. Conference, particularly in Kuala Lumpur, on international arbitration. It is clear that the world of arbitration law is small, but some may question whether the close relationship between the judge and the party constitutes a conflict of interest that could affect the impartiality of the arbitrator.
Then there’s the role of the lawyer representing Solo’s heirs, Ms. Elizabeth Mason. It has links to two US tech giants, Google and Facebook, which in 2021 complained about Malaysian laws in Sabah requiring local Malaysian ships to work there, which they lamented would impede repair of submarine cables. Ms. Mason is the vice president of an American charitable foundation funded by Google, whose board of directors is made up mostly of senior Google executives. It is also an institution Stanford Poverty and Technology Labfunded by Mark Zuckerbergfounder of Facebook.
Later in 2021, Google and Facebook announced the construction of a new undersea big data cable network for the Asia-Pacific region, connecting Japan, Taiwan, Guam, the Philippines, Indonesia and Singapore. This cable network goes beyond Malaysia. Mason’s ties to these tech giants, who are deeply unhappy with Malaysia’s policies in Sabah, may indicate that this lawsuit goes far beyond what is supposed.
Crucially, the dispute threatens to escalate tensions between Malaysia and Western Europe, just as the European Union seeks closer trade ties with Southeast Asia in response to economic “decoupling” with Russia and China.
Tribune written by Peter Kleppy
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