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MADRID COURT OF APPEAL CONFIRMS SULU ARBITRATOR GONZALO STAMPA’S CONVICTION FOR CONTEMPT OF COURT

MADRID COURT OF APPEAL CONFIRMS SULU ARBITRATOR GONZALO STAMPA’S CONVICTION FOR CONTEMPT OF COURT


On 17 May 2024, the Madrid Court of Appeal has notified its decision upholding the Madrid Criminal Court judgment of 22 December 2023 that found Mr Gonzalo Stampa guilty of contempt of court.

In its judgment, the Madrid Court of Appeal confirms that Mr Stampa knowingly and wilfully disobeyed the clear rulings and orders of the Madrid High Court of Justice resulting from the nullification of his appointment as arbitrator. The Madrid Court of Appeal has dismissed Mr Stampa’s appeal against the 22 December 2023 judgment issued by the Madrid Criminal Court, and confirms Mr Stampa’s six-month prison sentence and one-year ban from practising as an arbitrator.

These criminal proceedings started after the Spanish Public Prosecutor’s Office and Malaysia accused Mr Stampa of serious criminal contempt and of unqualified professional practice, on the grounds that he openly and knowingly disobeyed several binding orders of a Spanish court: specifically, the High Court of Justice of Madrid.

By way of reminder, the High Court of Justice of Madrid issued a final and binding order on 29 June 2021, in line with its case law, ruling that, as a foreign State, Malaysia had been improperly summoned to arbitrator appointment proceedings. The Court therefore annulled Mr Stampa’s appointment and all of his procedural actions in the so-called Sulu case, and ordered that Malaysia be properly summoned and the proceedings for the appointment of a new arbitrator restarted. The annulment of the appointment was later confirmed after a failed constitutional appeal by the Sulu claimants.

Following the appointment annulment order of 29 June 2021, the High Court of Justice of Madrid sent various orders to Mr Stampa instructing him to immediately bring an end to the Sulu arbitration. In a move that only Mr Stampa can explain, he decided to disobey the orders of the Court that had initially appointed him and then revoked his appointment. Notably, Mr Stampa collected more than USD 2.7 million from the Sulu claimants, who are funded by London-based litigation funder Therium.

After ignoring the orders of the High Court of Justice of Madrid, Mr Stampa changed the seat of the purported arbitration from Madrid to Paris at the request of the claimants in order to evade the oversight of the Spanish courts, which he had undertaken to obey when he accepted his initial appointment.
In December 2021, after this change of seat, Malaysia – which has complete and unwavering confidence in the Spanish judicial system – filed a complaint with the Spanish Attorney General against Mr Stampa on the grounds that he had acted in serious criminal contempt by ignoring the orders of the High Court of Justice of Madrid. In view of the reported facts, the Public Prosecutor of Madrid then filed its own complaint against Mr Stampa for serious contempt of court, to which the Public Prosecutor added the criminal offence of unqualified professional practice.

The Criminal Court in charge of the matter issued a ruling on 22 December 2023 declaring that Mr Stampa’s actions constituted a criminal offence. Mr Stampa filed an appeal against the judgment before the Madrid Court of Appeal.

The Madrid Court of Appeal has now dismissed Mr Stampa’s appeal and has confirmed that Mr Stampa had an obligation to comply with the rulings and orders of the Madrid High Court, regardless of his opinion of them or any developments in the purported arbitration that he illegally continued to chair, even after the annulment with retroactive effects of his appointment and of the partial award on jurisdiction that he had issued.

Malaysia welcomes this landmark ruling as a momentous victory for the rule of law that will help preserve the sanctity of international arbitration as an alternative form of dispute resolution. It confirms, once more, that the Sulu fraud was made possible by the criminal behaviour of a rogue arbitrator. Malaysia is therefore also confident that this victory will serve as a further deterrent to the ominous actions carried out by the perpetrators of the Sulu Fraud.

I wish to express my appreciation to Prime Minister, YAB Dato’ Seri Anwar Ibrahim for his steadfast commitment and determination towards protecting the sovereignty of Malaysia at all cost as well as his undivided support to the Malaysian team fighting this frivolous claims. My gratitude also goes to the Foreign Minister, the Ministry of Foreign Affairs, the Attorney General Chambers, the Legal Affairs Division, the Sulu War Room Special Secretariat, my cabinet colleagues and Malaysians generally for their continuous support in this fight. The Madani Government of Malaysia will continue to ensure that the sovereignty, security and interests of Malaysia are protected at all times.

 


AZALINA OTHMAN SAID
Minister in the Prime Minister’s Department
(Law and Institutional Reform)

18th May 2024