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A Historical Discourse of the Philippine Claim over Sabah

By Amando Respicio Boncales, B.A., M.S.Ed., M.A. Northern Illinois University

The Philippine-Malaysian dispute over the State of Sabah remains a

contentious diplomatic issue. There is a very limited amount of literature

available that discusses this complex issue. The works of Teodoro Agoncillo

and Renato Constantino, nationalist historians, discuss the issue. The

objective of this study is to shed light on the historical background of the

Philippine claim over Sabah by examining how various authors in the field

presented the issue.

In 1878, the Sulu sultan entered into a deed of pajak with Austrian

Gustavus Baron de Overbeck and Englishman Alfred Dent, who were

representatives of a British company. The deed was written in Arabic. In

1946, Professor Harold Conklin translated the term “pajak” as “lease.” The

1878 deed provided for an annual rental. This treaty constitutes the main

basis of the territorial dispute between the Philippines and Malaysia over

Sabah. The Philippines claims that the term “pajak” means “lease,” while

Malaysia claims that it means “cession.” 1

The Philippine claim to Sabah was formally filed in 1961 at The United

Nations during the administration of President Diosdado Macapagal (1961-

1 Senator Miriam Defensor-Santiago, “Sabah Issue In International Law,” News, Philippine Daily Inquirer, March 23, 2013,


1965) based on historical and legal claims. President Ferdinand Marcos

assumed presidency in 1965. His alleged Jabiddah plan, supposedly

proposing the invasion of Sabah, was publicly exposed, bringing the relations

of Malaysia and the Philippines into a state of mistrust. 2

The first foreign scholar to have extensively analyzed the Philippine

claim to Sabah was Michael Leifer, author of the monograph The Philippine

Claim to Sabah. It was a major departure from the documents published by

the Philippines government because it was the first to put the Sabah issue in

its proper historical contest. The paper provides a good background of the

Philippine claim to Sabah, although it relies heavily on a two-volume set of

documents published by the Philippine government. Leifer also utilizes

newspaper articles and books to place the Sabah issue in the context of

Macapagal’s presidency.

The author asserts Macapagal envisioned this as a diplomatic gain

rather than a political gain. Macapagal pictured Mania as the center of

Southeast Asia, a Mecca where the other Asian countries to flock to on

pilgrimage. He saw this new role as a means to become accepted by the

mainstream Asian countries by its stand with Indonesia against United

Kingdom backed Malaysia. He hoped to gain a new respect for the voice of

the Philippines, who up until this time had been mostly overlooked, shunned

even because of its support of American positions. They saw their position

2 Erwin S. Fernandez, “Philippine-Malaysia Dispute Over Sabah.” Asia-Pacific Social Science Review, vol. 7, no. 1 (2007) : 53.


as both the protagonist and mediator. Indonesia was perfectly willing to let

Philippines take that role. 3

Leifer maintains that the Macapagal approach to the issue more was

unbalanced. 4 Macapagal’s plan to use the Philippines to block Malaysia and

establish respect among Southeast Asia was flawed. The flaw was in his

inability to see the contradictions of his policy. Maphilindo, was meant as an

alternative to Malaysia and should have been an alliance among the states,

bonded over their fear of the Chinese and their desire to expand.

For Malaysia, however, the Chinese community is not an insignificant

numerical minority without domestic political import. Thus, to accept the

implications of Maphilindo was to invite alienation on the part of the

Malaysian Chinese. 5

In 1969, the year after Leifer’s book was published, under the auspices

of the National Historical Commission, the Philippines organized a conference

on Sabah. The proceedings were published in a book titled Symposium on

Sabah. One of the important chapters within the book is that of Prof. Rolando

N. Quintos, who suggests alternatives for the solution of the Sabah dispute in

his chapter, “The Sabah Question: Prospects and Alternatives." Quintos offers

some provocative ideas and argues that the issue of Sabah should be seen in

  • 3 Michael Leifer, The Philippine Claim to Sabah (Ag Zug: Inter Documentation Co., 1968), 48.

  • 4 Ibid., 73.

  • 5 Ibid., 73, 74.


its two aspects: First, the legal issue in regard to the proprietary rights of the

heirs of the Sultanate; and second, the question of political jurisdiction over

Sabah. Quintos proposed a compromise deal, arguing further that "the

Philippines [shall] accept the justice of the Malaysian appeal to self-

determination and accept as final the conclusion of the U.N. Secretary

General the United Nation of September 1963, provided that the Malaysians

are willing to submit the issue to the World Court or to a mutually acceptable

mediating body.” 6

The work of a Malaysian, Mohammed bin Dato Othman Ariff, The

Philippine Claim to Sabah: Its Historical, Legal and Political Implications,

extensively discusses the legal issues surrounding the claim. The main thesis

of this book is to discredit the legal basis of the Philippine claim to Sabah.

The author emphasizes the legal foundation of the United Kingdom’s claim to

Sabah based on possession and consolidation through peaceful and

continuous display of State activities.

Furthermore, Ariff illuminates the basis for the integration of Sabah to

Malaysia through the principle of self-determination. 7 On September 16, 1963

after a four-month referendum on Sabah and Sarawak, the Cobbold

Commision report was presented to the British government joining Malaya,

Singapore, Brunei, Sarawak and Sabah (North Borneo) to form Malaysia; this

  • 6 Fernandez, “Philippine-Malaysia Dispute Over Sabah,” 683-84.

  • 7 M. O. Ariff, The Philippines Claim to Sabah: Its Historical, Legal and Political Implications (Singapore: Oxford Univ. Press., 1970), 64.


after just a month of Sabah’s gaining it’s independence. 8 United Borneo Front

chairman Jeffrey Kitingan disputes the referendum in which Prime Minister

Najib Tun Razak and other’s claim that Sabahans’ desire to be part of

Malaysia. “There has never been a referendum on Sabah as stated by some

academics. In fact, the so-called referendum in 1962-63 was actually only a

sampling survey of less than four percent of the Sabah population,” he said. 9

Finally, Ariff argues that the peaceful settlement of the dispute would

require the Philippines to drop the claim and concentrate all of its efforts in

working closely and cooperating with Malaysia in the context of Association

of Southeast Asian Nation ASEAN. 10 For the heirs of the Sultan of Sulu, given

their established proprietary rights in 1931 through the North Borneo Court,

this kind of suggestion is unacceptable.

Another non-Filipino scholar, S. Jayakumar, who is from the University of

Singapore, also argues that the Philippine case is weak. Like Ariff, Jayakumar

invokes the idea of effective occupation on the part of the United Kingdom in

Sabah since 1878, which granted the British North Borneo Company a

charter of corporate character. The author contends that the Philippine claim

  • 8 BERNAMA, “LAHAD DATU: Historians Agree Sabah Rightfully Belongs to Malaysia,” March 6, 2013, News,


  • 9, “There Was No Sabah Referendum,” March 8, 2013,

10 Ariff, The Philippine Claim to Sabah, 64.


is abstract and vague, based only on historically derived rights of the heirs of

the Sultan of Sulu. Jayakumar further argues that neither the Philippines nor

the heirs of the Sultan have exercised sovereignty or been in effective

occupation of Sabah since 1878. Also like Ariff, the author emphasizes the

effective occupation of Sabah by the United Kingdom. Therefore, Malaysia, as

the successor state, is now the legitimate sovereign of Sabah. Like Ariff,

Jayakumar emphasizes the principle of self-determination.

In Sulu and Sabah: A study of British policy toward the Philippines and

North Borneo (1978), Nicholas Tarling, an 18th century historian postulates

British policy going back as far as the 18th century and continuing until 1903

was the context for Sulu and Sabah. In direct opposition to Tregonning’s

assertion, Tarling claims the 13 Protocol of 1885 did not necessarily inherit

the Sulu Sultanate’s sovereignty over Sabah. He acknowledges the 1878

agreement between the Sultan of Sulu and Baron Van Oberbeck was a lease

rather than a cession. He does however agree with Quintos that a

continuation of the lease in perpetuity could very well be the solution to the

ongoing dispute. 11

Under the agreement known as “The Madrid Protocol of 1885” Spain is

limited in its influence in the region including relinquishing all rights to

Borneo. This agreement between Spain, Germany and Great Britain requires

Spain to renounce all claims of sovereignty over the territories of Borneo that

11 Nicholas Tarling, Sulu and Sabah: A study of British policy toward the Philippines and North Borneo (Kuala Lumpur: Oxford University Press, 1978), 127.


had belonged to the Sultan of Sulu. It also renounced sovereignty that were

made of up of the islands of Balambangan, Banguey, and Malawali along

with everything within three maritime leagues from the coast and the

territories that formed the “British North Borneo Company.” 12

One of the scholars in political science who has done considerable

work on the Sabah issue was Lela Garner Noble, author of the book

Philippine Policy Towards Sabah: Claim to Independence. The author argues

that the Philippine foreign policy on the Sabah issue during the time period

from Macapagal through Marcos was evidence of Philippine’s desire to be

seen as independent from outside forces, most specifically the United States.

They wanted to improve what many Filipinos felt was an embarrassing image

as a puppet of the United States. The claim to Sabah demonstrates an

independent policy because the policy was “non-American in conception or

direction.” 13

Like most scholars who examined the Sabah issue, Noble, Sussman,

and Leifer view the issue as a political question, and none of them consider

the issue in a historical way. Although Leifer did provide considerable

background material about the Sabah issue in his research, he still saw it as

largely a contemporary political angle. The authors mentioned above do not

  • 12 “PROTOCOL OF 1885,”

  • 13 Lela Gamer Noble, Philippine Policy Toward Sabah: a Claim to Independence (monograph No 33) (Tucson,

Ariz: Assn for Asian Studies Inc, 1977), 8.


discuss the historical background and instead concentrate on contemporary

political issue only.

As one may recall, both Ariff and Jayakumar disagree with the Philippine

case. Regarding the transfer of sovereignty from the British North Borneo

Company to the British Crown of Sabah in the 1878 Deed of Lease, the

Philippine government takes the position that it was illegal and "an act of

naked political aggrandizement." Hence, the transfer of sovereignty from the

British Crown to the Federation of Malaysia of Sabah was unwarranted.

Paridah Abd. Samad and Darussalam Abu Bakar in "Malaysia-Philippine

Relations: The Issue of Sabah,” published in 1992, emphasized the bilateral

relations between the two countries. The paper presented sub-themes such

as (a) the political and security repercussions of the Sabah dispute with

regard to the Moro secessionism in the south, (b) the overlapping of

territorial boundaries, (c) Malaysian incursion into Philippine waters, and (d)

the issue of Filipino refugees and illegal immigrants in Sabah from the

Macapagal to the Aquino administrations. 14

The Philippines has nothing to lose by preserving the status quo in

Sabah. Their inactivity comes at a price of missed opportunities. However,

Malaysia stands to benefit from the treasures of Sabah and its waters.

Though the price of the status quo is negligible, this non-resolution of a claim

14 Paridah Abd. Samad and Darussalam Abu Bakar in "Malaysia-Philippine Relations: The Issue of Sabah,” Asian Survey 32 (June 1992): 554.


by the Philippines would be a stumbling block to the intra-ASEAN


Malaysia is fully supported by Great Britain and the Commonwealth of

Nations in rejecting the claim, while the Philippines has literally no

international support. Even the United States, Philippine’s biggest ally had

assumed a neutral position. Though the other ASEAN countries appeared to

distance themselves from the issue so as not to take sides between two of

their members, privately acknowledged Malaysia’s rights to the territory. 15

Malaysia asserts that it has honored its financial obligations and is

prepared to negotiate directly with the Sulu heirs without Philippine intrusion.

They assert this matter is between them and the heirs of the Sultan of Sulu.

In fact the descendants of the Sultan receives M$5,000 ($2,008 US) every

year as part of the cession of the area leased to the British Company in the

19th century. 16

Arnold M. Azurin’s Beyond the Cult of Dissidence in Southern Philippines

and Wartorn Zones in the Global Village (1996) devoted Part Two to the

Sabah issue. Azurin argues in favor of dropping the Philippine claim, except

the proprietary rights of the heirs. The various treaties signed by the Sulu

Sultan since the 18 th century followed a historical pattern of ceding and

leasing certain portions of the sultanate’s dominion to outside powers,

  • 15 Ibid., 566.

  • 16 Ibid., 554-67.


depending on the rise and ebb of its own fortunes and powers relative to that

of the contracting parties. “Unfortunately, those contending parties had in

mind to transform the 'franchise' into a lasting colonial dominion.” 17

Malacanang should have thought in the 1960s that to claim ownership of a

piece of land through Torrens Title is one thing, while claiming dominion or

sovereignty over a vast territory is another. 18

Another work that has a fresh interpretation of the issue is Asiri

Abubukar’s “Bangsa Sug, Sabah and Sulus' quest for Peace and Autonomy in

Southern Philippines” (2000). The author asserts that there exists a

continuing sense of identification and affiliation among the Sulu people with

Sabah. Because of the strong sense of connection and affiliation to Sabah

among the people in Sulu, Abubakar argues that settling the Sabah issue is

vital to peace process in the southern Philippines, particularly in the quest for

autonomy by the Sulu people. The identification, connection, and affiliation

of the Sulu people with Sabah is through the defunct Sulu Sultanate; the

influx of Filipino immigrants to Sabah further reinforces the connection. 19

  • 17 Arnold Molina Azurin, Beyond the Cult of Dissidence in Southern Philippines and Wartorn Zones in the Global

Village (Quezon City: UP Center for Integrative and Development Studies and University of the Philippines Press, 1996), 107.

  • 18 Ibid., 113.

  • 19 Asiri Abubakar, Bangsa Sug, Sabah and Sulus’ Quest for Peace and Autonomy in Southern Philippines (Quezon

City: University of the Philippines, 2000), 248.


Another factor that Abubakar pointed out is that the strategic

location for trade of the Sulu-Sabah area since the height of the Sulu

Sultanate will continue to be significant as part of the Brunei, Indonesia,

Malaysia, Philippines-East Asian Growth Area (BIMP-EAGA). The author

believes the Sabah issue is intertwined with the Moro problem in Mindanao. 20

He postulates that resolving the Sabah issue would indeed move Southern

Philippines closer to a lasting peace.

For the most part of the Sabah issue, it is the 1878 deed that causes

the most contention among various academics. Tarling maintains that the

“territory was held by the Company under a lease agreement, and this the

British Government should admit.” 21 However, he believes that the Philippine

government cannot “inherit the sultanate’s sovereignty over North Borneo”

under the protocol of 1885. His recommendation is the continuation of the

lease in perpetuity. 22

A History of modern Sabah: 1881-1963 (1960), written by historian K.

G. Tregonning, analyzes the Sabah issue that the agreement in 1878

between the Sulu Sultans and Baron Van Overbeck was one of a cession not

  • 20 Ibid., 265.

  • 21 Tarling, Sulu and Sabah, 349.

  • 22 Ibid., 349.


a lease; furthermore, several treaties and international conventions have

excluded North Borneo from the territory of the Philippines. 23

Arrif’s The Philippine Claim to Sabah: Its Historical, Legal and Political

Implications has a strong pro-Malaysian sentiments and maintains that the

agreement of 1878 was a “Deed of Cession.” 24 Instead, he recommends that

given the close historical ties between the peoples of the Philippines and

North Borneo, both Malaysia and the Philippines should maintain and

promote healthy relations to ensure the security of the region. The adaption

of this “formula” would require the Philippines to drop its claim and

concentrate all of its efforts on working closely with Malaysia. 25

Leifer’s The Philippine Claim to Sabah clarifies that the focus of his

study is the political and non-legal aspect of the presentation of the

Philippine claim. However, he recognizes that the predecessors of the British

North Borneo Company (BNBC) were private lessees of the Sultan of Sulu,

and in effect cannot acquired dominion over a territory through a contract,

also known as Pajak of 1878. The BNBC was barred from acquiring

sovereignty by its private status and by the terms of its charter. 26

  • 23 K.G. Tregonning, A History of Modern Sabah: 1881-1963 (London: Her Majesty’s Stationary Office, 1960), 68.

  • 24 Ariff, The Philippine Claim to Sabah, 34, 37.

  • 25 Ibid., 64.

  • 26 Leifer, The Philippine Claim to Sabah, 1.


International law provides for the lease of a territory in which a state

grants another state the right to control at least part of the lessor’s territory.

Once the territory is leased the sovereignty remains with the lessor and not

under its jurisdiction which is granted to the lessee. The lease of the

territory is usually given in exchange of an annual fee. 27

After examining the existing literature regarding the Philippine claim, I

believe that the Philippine claim to Sabah is valid, with strong historical

roots. It is my opinion, like those of Tarling and Tregonning, that the Deed of

1878 is not a transfer of sovereignty, but a lease granted by the Sultan of

Sulu to British subjects; a private venture. In this historiographical essay, I

observe that the Sabah issue is a post-colonial symptom that needs to be

treated to achieve lasting peace in this part of Southeast Asia, an opinion

shared with Azurin’s Beyond the Cult of Dissidence in Southern Philippines

and Wartorn Zones in the Global Village.

Historical Foundation

The rise of Islam in Southeast Asia revolutionized specific social

institutions in the region. Islam as a politico-religious institution had triggered

the modification and introduction of social institutions that shaped present

day Southeast Asia. Among the most important developments was the

introduction of the sultanate (a developed political and at the same time

religion institution) to the region. For the purpose of this research, my study

27 Miriam Defensor-Santiago, “Sabah Issue In International Law,” News, Philippine Daily Inquirer, March 23, 2013,


will focused on the development of the Sulu sultanate as part of the greater

Malayan world and the eventual claim of the Philippines to Sabah (as the

political successor at sovereignty of the Sulu Sultanate).

The objective of this study is to trace the historical and legal basis of

the Philippine claim over the State of Sabah. The methodology of the study

will be thematical not chronological. Instead of being conscious of the

timeline, the study will concentrate on the major themes that shaped the

sultanate’s Sabah dominion, lease and agreements with western world and

the present claim of the Philippines to the Sabah State. The words “North

Borneo,” “British Borneo” or “Sabah” are used interchangeably in the study.

These words are used to that portion of the North Borneo Island to which the

sultan of Sulu once ruled.

Available historical records seem to indicate that the dispute territory

was a possession of the Sultan of Sulu which evidently was leased to the

founders of a British chartered company. With protection of the crown

guaranteed over the lease territory, later became the foundation British

annexation and colonization. Eventually, Sabah was included in the

federation of Malaysia.

The foundation of the Sultanate of Brunei and Sulu

The sultanates of Sulu and Borneo were well established political entity in the

Malay world during the late 15 th and 16 th century. The Arabs, who had settled

in Malacca in 1400, did not extended political control over the two sultanates


other than spreading the teaching of Islam. The Chinese did the same who

frequented the areas held by the two sultanates to trade with the natives.

The sultanate of Sulu was founded in 1380, nearly one and a half

century before the arrival of the Spaniards in the Philippines. The sultanate

possessed an efficient political organization, extending its influence in

Zamboanga, Basilan, Palawan, aside from the Sulu archipelago. 28 During its

supremacy, the sultanate extended its control as far as the Visayas and

Luzon until controlled by the Spanish conquistadores in the Philippines. For

many years to come, as the colonial government consolidated it territory, the

sultanate was to remain a problem by the Spanish and American colonial

government (viewed as pirates and buccaneers). 29

The Sultanate of Brunei, on the other hand, was founded in the 15 th

century. For a brief period, it became a tributary of the Majapahit Empire. 30

Before the British entry in to the region, the sultanate exercise nominal

control over the whole northwestern and eastern coast of the island.

Related by its common Malay origin, the two sultanates were bounded

together by religious ties with the spread of Islam in the Malay world. Trade

  • 28 Najeeb M. Saleeby, The History of Sulu (Manila: Filipiniana Book Guild, 1963), 125.

  • 29 Peter Gowing, Mosque and Moros: A Study of Muslim in the Philippines (Manila: Philippine Federation of

Christian Churches, 1964), 122-23.

  • 30 Elizabeth C. Hassell, “The Shri-Vijayan and Madjapahit Empire,” Philippine Social Science and Humanities

Review, Vol, 16, Iss. 1, March 1953, 3-86.


between their respective subjects served to reinforce this relationship even


Borneo and the Western World

The Portuguese and the Spaniards, in search of spice, were the earliest

among the westerners to arrive in the East Indies and establish themselves

in Malacca early in the 16 th century. British interest in the Sulu-Borneo area

stemmed primarily from the East Indian Company’s desire to establish a

factory. 31 The head of this particular project was Alexander Dalrymple, who,

in January 1761, negotiated a Treaty of Friendship and Commerce with the

Sultan of Sulu. The agreement was confirmed by another treaty in February

1763 reiterating the major provision, emphasizing defense alliance.

But the company appeared unable to take advantage of this concession.

When it finally decided, in 1769, to occupy Balambangan and made use of

the ceded territory, disease and strained relations with the Sultan of Sulu

erupted that led to open war, hence preventing the development of the

enterprise. The Balambanagn settlement was abandoned in 1775 until a

second attempt was made in 1803, which again was abandoned in 1805.

Under the Act of 1858, the East Indian Company was dissolved and its

interests were transferred to the crown. However, evidence seems to suggest that

the territories ceded by the Sulu failed to interest the British government further.

31 W. H. Treacher, British Borneo: Sketches of Brunai, Sarawak, Labuan, and North Borneo (Singapore: Govt. print. dept, 1891), 5. Stable Url


Lord Canning, as the first viceroy to British India, repudiated the “doctrine of lapse”

and was further enunciated by his predecessor (the Earl of Derby). The Earl of

Derby, in explaining to the British Ambassador in Germany the nature of Spanish

claim to North Borneo:

It should be mentioned that previously to 1836 Spain claimed the island on the ground of first discovery, ancient treaties, and alleged occupations; but those claims were never admitted by


Britain. . . .

Great Britain also had rights under Treaties with

Sulu, dated 1761, 1764, and 1769, BUT those treaties must be

considered as having lapsed. 32 (Emphasis added)

Almost two decade before the dissolution of the East Indian Company, an

Englishman named James Brooke 33 visited Sarawak, and shortly after was

offered by the Sultan of Brunei the governorship of Sarawak in exchange for

aid in the face of continuing rebellion. Later in 1841, Brooke was proclaimed

Rajah and in subsequent years, he succeeded in minimizing piracy in

Sarawak, Brunei, and North Borneo with the cooperation of the British Navy.

The involvement of Brooke made him “the supreme ruler of Sarawak or the

White Rajah.” 34

  • 32 Official Gazette of the Republic of the Philippines, “The Earl of Derby to Lord Odo Russell,” January 1876,

  • 33 The Rajah of Sarawak, Sir James Brooke, KCB, LL.D (29 April 1803 – 11 June 1868) was a

British statesman. His father Thomas Brooke was English; his mother Anna Maria was born in Hertfordshire, England, the daughter of Scottish peer Colonel William Stuart, 9th Lord Blantyre, by his mistress Harriott Teasdale. James Brooke was born in Secrore, a suburb of Benares, India.

  • 34 Steven Runciman, The White Rajahs: a History of Sarawak from 1841 to 1946 (Cambridge: Cambridge

University Press, 1960), 73, 182.


In 1846, the British flag was raised on Labuan Island off the cost the east

coast of Sabah. And in the following year, Great Britain and Brunei the

concluded a Treaty of Friendship and Commerce, at the same time that

Labuan was ceded in perpetuity to the crown.

The United States became similarly attracted to Borneo, eager of

obtaining the favors that had been secured by other western powers. In

1850, a treaty was signed for the United States advantages for the most

favored nation, and later an American consul was appointed to Brunei.

Borneo-Sulu area became increasing attractive in terms of commerce for its

strategic location in the region, especially maritime traffic.

Brunei’s Cession of Sabah to Sulu.

Although wealthy, the Sultan of Brunei had a court that was corrupt

and ridden with intrigues. Consequently, the sultan found difficulty in

extending control to many of his datus throughout the domain, rebellion and

strife was frequent in the sultanate. It was under this circumstances that the

territory, comprising most of what is now Sabah State, was ceded to the

neighboring sultanate as the prize for military assistance.

The murder of the 12 th Sultan of Brunei, Muhammad Ali, by Bendehara

Abdul Mubin resulted to civil war. The perpetrator claimed the throne but was

contested by Pengeran Bongso, a nephew and son-in-law of the deceased

sultan. Both contestants to the throne asked the support of Badarud-din, a

relative of both and the reigning Sultan of Sulu. Badarud-din was unable to


solve the crisis, but supported Pengeran Bongso (who took the name Sultan

Muaddin). Sultan Muaddin emerged victorious and the large territorial land

known today as “the State of Sabah” was ceded to the Sultanate of Sulu in

exchange of the military help and support.

The observation of the contemporary British officer will give us more

insight of the territory ceded:

The first material alteration in the sovereignty of the territorial possession took place in the kingdom of Borneo Proper, when his Raja was obliged to call in the aid of the Solos to defend him against an insurrection of the Maruts and Chinese. In consideration of this important aid, the Raja of Borneo Proper ceded to the Sultan of Solo all that portion of Borneo then belonging to him, from Kimanis in latitude 5° 30’ north to Tapean-durian, in the straits of Macassar, which include the whole north of Borneo. 35

The sultanate’s connection with Northern Borneo goes back as early as

1521, as far as the written record is concerned, when a Brunei Sultan was

married to a Sulu princess. This early connection between the two sultanates

cemented the familial relationship. This political marriage developed into a

politico-military allegiance.

Meanwhile, as trade flourished in the region, the mercantilist policies

adapted by the colonial powers deprived the Sultanate of Brunei and Sulu of

their own profitable commercial activity. Thus driven into piracy and

smuggling, the Sulus and the Bruneis continually menaced western trade,

presenting a problem that was to persist for many years.

35 J. Hunt Esq., “Sketch of Borneo, or Pulo Kalamantan.” The Expedition to Borneo of HMS Dido. Vol. II (London:

Chappan and Hall, 1846), xxiii.


Territorial Grant from Brunei

Baron von Overbeck, Austrian Consul-General at Hongkong at that

time, convinced Dent in supporting a venture in Sabah and together they

planned to sell their rights to any interested government. 36 With the money

he received from Dent to conduct negotiations, the baron sailed to Brunei.

He succeeded in persuading the Sultan, who presumably could not resist the

tempting compensation offered. On December 29, 1877, the sultan entered

into agreement with von Overbeck, in which the latter gained three territorial

“grant” and for which the sultan received a total annual payment of 12, 000

Malayan Dollars.

In addition the sultan appointed von Overbeck “supreme

ruler” with the title of “Maharajah of Sabah and Rajah of Gaya and

Sandakan,” with delegated powers to govern the territory. 37

The Baron, however, evidently realized that several factors tended to

depreciate the value of the grants he had obtained. This is because more

than a century and a half earlier the territory had already been ceded to the

Sultan of Sulu who was in actual possession. Moreover, Brunei chiefs refused

to recognize the Sultan of Brunei’s rights to cede the territory. 38

  • 36 K.G. Tregonning, A History of Modern Sabah, 1881-1963 (Kuala Lumpur: University of Malaya Press, 1965),


  • 37 Official Gazette of the Republic of the Philippines, “Letter of Francis B. Harrison to Vice President and Secretary

of Foreign Affairs Elpidio Quirino,” February 27, 1947, to-vice-president-and-secretary-of-foreign-affairs-elpidio-quirino/. Mr. Harrison was a former United States Governor-General of the Philippine Islands. He served as Special Adviser on Foreign Affairs to President Manuel A. Roxas.

  • 38 Ibid., 14.


Von Overbeck, aware of the Sultan of Sulu’s dominion in North Borneo, found

it necessary to entered into negotiation with the sultan for the lease of the

territory. Overbeck and William W. Treacher, the Acting British Consul-General

at Labuan Island in Borneo, went to Sulu in January 1878. The contract dated

January 22, 1878, was drafted by Overbeck himself and was written in

Malayan language with Arabic character.

Territorial Lease from Sulu.

From Labuan, Baron von Overbeck, Joseph W. Torrey, and William Clark

Cowie sailed to Jolo on board the steamer, America, arriving at their

destination on January 16. Consul Treacher also reached Jolo on the same

day, having sailed separately on the British Warship, Fly.

Von Overbeck and his companion were shrewd negotiators and their

combined effort brought to bear on the sultan, already hard-press by an

ongoing campaign in Sulu, was hardly in a position to refuse. During the

bargaining, Cowie, whom the sultan had great confidence as a gun-

smuggling partner, contributed his own persuasive influence after having

been led to believed that von Overbeck would reward him. 39

Treacher, whom the sultan consulted, said that Overbeck represented “a

bona fide British company,” and intimated to the Sultan that the Spanish

Captain-General himself was at the head of the expedition already in

Zamboanga poised and ready to destroy Jolo; and that the Sultan of Brunei

39 Tregonning, A History of Modern Sabah, 16.


had recently ceded to them the territory and was already to take possession

of it anyway. 40 Evidently a lease of the sultan’s possession in Sabah, its

pertinent provisions read thus:

We Sri Paduka Maulana Al Sultan Mohammad Jamalul A’lam, son of Sari Paduka Marhum Al Sultan Mohammad Pulalum, Sultan of Sulu and of all dependencies thereof, on behalf of ourselves and for our heirs and successors, and with the expressed desire of all Datus in common agreement, do hereby desire to lease of our own free will and satisfaction, to Gustavus Baron de Overbeck of Hong Kong, and to Alfred Dent, Esquire, of London, who act as representatives of a British company, together with their heirs, associate, successors, and assigns forever and until the end of time, all rights and powers which we possess over all the territories and lands tributary from the Pandasan River on the east, and thence along the whole east coast as far as Sibuku on the South, and including all territories, on the Pandasan River and in the coastal area, known as Paitan, Sugut, Banggai, Labuk, Sandakan, China-Batangan, Murniang and all other territories and coastal lands to the south, bordering on Darvel Bay and as far as the Sibuku River, together with all the lands which lie within nine miles from the coast.

The cession (as the Malaysian prefer to interpret it) or lease (as the Sulu

Sultanate maintain) of Sabah to the British began in the Treaty of 1878

between Baron de Overbeck and His Highness the Sultan Jamal Al-Alam was

signed for an annual payment of 5,000 Malayan dollars.

It should be noted that Consul Treacher succeeded in formalizing the

participation of his government in the agreement, by affixing the

participation of his government in the agreement, by affixing his signature as

40 Mujamad Dehamalul Alam, “Friendly Letter from Our Brother the Paduca Majarasi Maulana Sultan Mujamad Dehamalul Alam Addressed to His Brother His Excellency the Governor Captain-General of the Philippines,” July 4, 1878,




a sole witness to the transaction. Unlike in the Brunei grants of the previous

year, Treacher’s recommendation were accepted by the Sulu Sultan, namely,

that the “consent” of the British government would first be obtained before

any transfer of territory and that its “consideration and judgment” shall be

sought in event of any dispute.

Together with the Territorial Agreement, the sultan also appointed von

Overbeck as “supreme and independent ruler” with the title of “Datu

Bandahara and Rajah of Sandakan,” delegating him as a vassal power with

which to administer the territory. However, the sultan made it clear that

Oberbeck made the title not him. 41

The Philippines Claim over Sabah and its Arguments.

It is the thesis of the Philippine government that the contract of 1878

was a lease, and not a transfer of ownership or sovereignty. Treacher, who

was present at the signing of the contract and as witness, characterized the

contract as a lease and referred to the money payment as annual rentals.

Diosdado Macapagal, who served in the Department of Foreign Affairs

in 1946 and later became President of the Philippines, advocated filing a

claim at the United Nations. The filing took place on June 22, 1962. They

claim sovereignty, jurisdiction and proprietary ownership of North Borneo.

The Philippines claim they have the legal and historical rights to North

Borneo as the successor-in-interest of the Sultan of Sulu.

41 Ibid.


In the early part of the 1960s it became an imperative for the

Philippines, aside from the strong historical and legal rights that North

Borneo is important to Philippine territory and vital to its security. At this time

(1960’s), communism in the region was in its height and Philippines were

anxious that Malaya would succumb to the potent communist threat from

mainland Southeast Asia, creating a scenario in which a communist territory

would be immediately at the southern frontier of the Philippines. 42

Philippine anxiety on the communist threat has subsided, but another

form of menace developed. From the dynamics of the Muslim separatist

movement in the south, there evolved a more terrifying threat. The Sabah

state of present Malaysia harbored some of the kidnappers, Abu Sayyaf and

Al-Quedah, provoking international concern through widespread violence,

state wide terror and their vision of establishing independent states.

The British North Borneo Company based its rights from the grant

signed in January, 1878. In it, the sultan of Sulu granted certain concessions

and privileges to Baron de Overbeck, an Austrian national who was at the

time the Austrian Consul-General at Hongkong, and Alfred Dent, a British

national, in consideration of an annual rent or tribute of 5,000 Malayan

dollars. Dent later bought out Overbeck, and transferred his rights to the

42 Official Gazette of the Republic of the Philippines, “II. Statement at the Opening Meeting of the British- Philippine Talks,” January 28, 1963, statement-at-the-opening-meeting-of-the-british-philippine-talks/.


British North Borneo Company. The Company was granted a Royal Charter on

November 1, 1881.

The Philippine government argues that Overdeck and Dent (the

leasors) did not acquire sovereignty or dominion over North Borneo. This is

because, according to international law, sovereignty can be ceded only to

sovereign entities (e.g. government to government agreement) or to

individuals acting for sovereign entities (agreement between leaders of

nations). Obviously, Overbeck and Dent were private citizens of their

respective countries who did not represent any sovereign entities, but

instead acted as mere businessmen who only acquired grant of lease from

the Sultan of Sulu. Hence, neither of them did not, and could not, acquire

sovereignty or dominion. 43

The above letter was written by the British Foreign Minister to explain

and respond to the Spanish protest regarding the grant of Royal Charter to

the British North Borneo Company. It was not the Spanish crown which made

the protest alone; the Dutch government also protested in the same way.

Again, Lord Granville maintained in his letter to the Dutch that the British

North Borneo Company was a mere administrator, and that the “British

Government assumed no sovereign rights whatever in Borneo.” 44

The Philippine government, therefore, strongly argues that the transfer of

  • 43 Nestor M. Nisperos, Philippine Foreign Policy on the North Borneo Question (Pittsburg: University of

Pittsburgh Press, 1969), 134.

  • 44 Ibid.


rights, powers and interest by the British North Borneo Company to the

British Crown was not possible. North Borneo Cession Order of 1946 took

place just six days immediately after the Philippines was declared

independent by the United States. In the International Law, a transferee

(British Crown) cannot acquire more rights than the transferor (British North

Borneo Company). In other words, how can the British Crown exercise

sovereign rights in the form of protectorate in 1946, when the British North

Borneo Company did not exercise nor assume sovereignty over North

Borneo? In other words, how can the British North Borneo Company transfer

sovereignty to the British Crown, which the company did not have in the first


It has been said that President Manuel L. Quezon of the Commonwealth

of the Philippines (the transitional, semi-autonomous government of the

Philippines under American sovereignty which preceded the independent

republic) “had decided not to recognize the continued existence of the

Sultanate of Sulu, particularly in reference to North Borneo.” The Philippine

Department of Foreign Affairs was not able to find a written record of this

statement. This pronouncement was against the Organic Law of the

Philippine Commonwealth, since the power to give and terminate recognition

during the Commonwealth Philippines was vested only in the Congress of the

United States of America (being the colonial power). Aside from the political

technicality, International Law dictates that any withdrawal or termination of


recognition does not imply the dissolution of the entity affected by the

withdrawal. 45

The Philippine government believes that Dent, who was granted a

Royal Charter in the form of British North Borneo Company by the British

government, to which the British Crown derived its claim of sovereignty, was

not authorized to acquire sovereignty or dominion. Evidence to this was the

official correspondence of Lord Earl Granville, British Foreign Minister at the

time, in his letter to the British Minister in Madrid dated January 7, 1882,

explaining the character of the Charter Grant of the British North Borneo

Company, as follows:

The British Charter therefore differs essentially from the previous Charters granted by the Crown to the East India company, the Hudson’s Bay Company, the New Zealand Company, and other Associations of that character, in the fact that the Crown in the present case assumes no dominion or sovereignty over the territories occupied by the company, nor does it purport to grant to the Company any powers of government thereover; it merely confer upon the persons associated the status and incidents of a body corporate, and recognizes the grants of territory and the powers of government made and delegated by the sultan in whom the sovereignty remains vested…As regards the general feature of the undertaking, it is to be observed that the territories granted to the Company have been for generations under the government of the Sultan of Sulu and Brunei, with whom Great Britain has had Treaties of Peace and Commerce. 46 [Emphasis Added]

  • 45 Ibid.

  • 46 Official Gazette of the Republic of the Philippines, “Earl Granville to Mr. Morier,” January 7, 1882,


The British Foreign Minister writes this letter to explain and respond to

the Spanish protest regarding the grant of Royal Charter to the British North

Borneo Company. It was not the Spanish crown who made the protest alone;

also the Dutch government protested. Again Lord Granville maintains, in his

letter to the Dutch, that the British North Borneo Company was a mere

administrator, and that “British Government assumed no sovereign rights

whatever in Borneo.” 47

The Philippine government, therefore, strongly argues that the transfer

of rights, powers, and interest by the British North Borneo Company to the

British Crown, known as North Borneo Cession Order of 1946 (that took place

six days immediately after the Philippines was declared independent by the

United States), was not possible. In the International Law, a transferee

(British Crown) cannot acquire more rights than the transferor (British North

Borneo Company). In other words, how can the British Crown acquire

sovereign rights (in the form of protectorate in 1946), when the British North

Borneo Company did not exercise nor assume sovereignty over North

Borneo? Again, since Overbeck and Dent did not acquire rights of

sovereignty or dominion over North Borneo their transferee (British North

Borneo Company), also, did not acquire rights of sovereignty or dominion.

47 Official Gazette of the Republic of the Philippines, “Statement and Application Addressed to the Marquis of

Salisbury, K. G., Secretary of State for Foreign Affairs, &c., &c., &c., by the Undersigned, on Behalf of Themselves and Their Associates,” December 2, 1878,




The 1930 Convention between the United States and Great Britain

and its implication to the Philippine Sabah Claim

Under the Carpenter Agreement of 1915, the Sultan of Sulu agreed to

relinquish its temporal power over Sulu but retained his sovereignty over

North Borneo. As Governor Carpenter clarified in this communication to the

director of the Non-Christian tribe on May 4, 1920, as follows:

It is necessary however that there be clearly (sic) of official record the fact that the termination of the temporal sovereignty of the Sultanate of Sulu within American territory is understood to be wholly without prejudice or effect as to the temporal sovereignty and ecclesiastical authority of the sultanate beyond the territorial jurisdiction of the United States Government especially with reference to that portion of the Island of Borneo which as a dependency of the Sultanate of Sulu is understood to be held under lease by the chartered company which is known as the British North Borneo Company. ”

The American Governor General of the Philippine Island Francis

B. Harrison made it more clear that: “It is true Governor Carpenter’s

contract or treaty with the Sultan of Sulu of 1915 deprived the Sultan

of his temporal sovereignty in the Philippine archipelago but did not

interfere with the Sultan’s status of sovereignty over British North

Borneo lands.” 48

It is in the context of this statement that the 1930 Convention between the

United States and Great Britain defined their respective boundaries. The

United States did not intend to claim North Borneo. By this act of defining

  • 48 Official Gazette of the Republic of the Philippines, “Letter of Francis B. Harrison to Vice President and


the respective boundaries, the United States did not cede or waive anything

to the British Crown.

Submission of the Sultan of Sulu of the Sovereignty of Spain 1851 and Protocol of 1885

Spain’s claim to North Borneo is based on the fact the sultanate

“admitted herself a vassal of Spain on the basis of this treaty Spain was

claiming all the possessions of Sulu and North Borneo.” However, this is not

necessarily as it seems. The fact is North Borneo was not included in the

former treaty. The British government did not recognize the Spanish claim.

In a Protocol of Peace between Spain, Germany and Great Britain signed

March 7, 1885 Spain gave up its claims of sovereignty over North Borneo to

Great Britain leading to British claim of sovereignty since then. 49

The document signed by the sultan in 1878, recognizing Spanish sovereignty

over “Jolo and its dependencies,” had no mention on the inclusion of the

sultan’s territory in North Borneo. It is important to first clarify that Spain

never acquired sovereignty over North Borneo. In the protocol signed, the

term “pretension” to sovereignty over North Borneo was used; hence Spain

did not transfer sovereignty to Great Britain (a sovereignty Spain never had;

it was merely a pretension). Second, “Jolo and its dependencies” was a geo-

political unit different and distinct from the North Borneo possession. To give

49 Tregonning, A History of Modern Sabah: 1881-1963, 22.


a more vivid example for this argument, let us try to examine Spanish geo-

political units in its Asian positions, known as “Espana Oceanica:” 50

  • 1. The Philippine Archipelago proper;

  • 2. The Island and archipelago of Jolo, conformably with existing treaties with the Sultan of Sulu;

  • 3. The portion of Northeast cost of Borneo that forms part of the dominion of the Sultan;

  • 4. The Marianas Islands; and

  • 5. Other territories which now belong or which may belong in the future to Spain.

North Borneo was not considered a dependency of Jolo. As shown in the

list of “Espana Oceanica,” North Borneo was a geo-political unit different and

distinct from the Archipelago of Jolo. It is clear that the sultan did not include

his territory and dominion in North Borneo in signing the treaty recognizing

the Spanish sovereignty. Another thing to consider was the Spanish Geo-

political division in “Espana Oceanica.” In the Spanish geo-political law, the

regulations were clear about that. 51

The signing of the sultan in 1885 recognizing Spanish sovereignty over

“Jolo and its dependencies” did not transfer sovereignty to Great Britain. In

  • 50 University of the Philippines, The Philippine Claim to a Portion of North Borneo: Materials and Documents

(Diliman, Quezon City, Philippines: Institute of International Legal Studies, University of the Philippines Law Center, 2003), 287.

  • 51 Ibid.


the protocol of peace between Germany, Great Britain, and Spain, it was

clearly stated that the Spanish claim of sovereignty was worded in the text

as “pretension.” By this, it did not result in transfer of sovereignty from

Spain to Great Britain. Therefore, the contention that Spain’s renunciation of

sovereignty over its North Borneo territory in favor of Great Britain that

resulted in transfer of sovereignty from the Sulu Sultanate to Great Britain is


Macaskie Dictum of 1939

In a 1939 case the heirs of Sultan Jamalul Kiram claimed money was

owed to them under the 1878 grant. They were awarded a “cession of right”

by the High Court of North Borneo. Nine heirs of the Sultan of Sulu won the

award in the Macaskie Judgment. Charles Frederick Cunningham Macaskie

was the presiding chief justice 52 The ruling was made on the shares entitled

by each claimant. 53

  • 52 “Charles Frederick Cunningham Macaskie (1888-1969) was called to the bar through Gray's Inn, entered North

Borneo in 1910 and served in the First World War in the Royal West Kent Regiment. He was Chief Justice and Deputy Governor, North Borneo, 1934-1945, Brigadier and Chief Civil Affairs Officer, British North Borneo, 1945- 1946 and Commissioner for War Damage Claims, Borneo Territories, 1947-1951. He held the position of Acting British Judge, New Hebrides in 1955, 1958 and 1959. 1n 1946 he married D. Cole-Adams, daughter of W.H. Legg.” Source: Frederick C. Macaskie, “Papers of Charles Frederick C. Macaskie” (University of Oxford: Bodleian Library of Commonwealth & African Studies at Rhodes House, February 28, 2012),

  • 53 Rodolfo C. Severino, Where in the World Is the Philippines? Debating Its National Territory (Singapore:

Institute of Southeast Asian Studies, 2011), 62.


The issue before the court was the identity of the heirs of the sultan

who were entitled to receive payments after his death. Through their

attorney, they had the only an English translation by Maxwell and Gibson, a

translation of the Grant of 1878 that incorrectly characterized this as a

cession instead of a lease. A later translation made it clear that this was an

incorrect translation.

It should be recalled, that the Grant in 1878 is in Arabic script and is

worded in the Malayan language. When the lawyer of the heirs filed the

case, he had no original copy of the Grant. The erroneous Maxwell-Gibson

translation was the one used, quoted, and paraphrased in the complaint filed

by the attorney for the heirs of the Sultan. Years after the Macaskie dictum

was made (which translated the Grant as cession instead of lease), the

Philippine government had the copy translated into English. According to the

result of the translation, the Grant of 1878 was a Lease Agreement. Under

this circumstance, the Philippine Government could not accept the dictum of

Judge Macaskie. In the judgment, the Grant of 1878 was viewed as a

permanent cession or sale, and that the money that was to be paid to the

heirs is “cession money.” 54

The former United States Governor General of the Philippine Islands,

Francis Harrison repudiated the Macaskie judgment stating, “Upon

54 Official Gazette of the Republic of the Philippines, “Letter of Francis B. Harrison to Vice President and Secretary of Foreign Affairs Elpidio Quirino,” February 27, 1947, to-vice-president-and-secretary-of-foreign-affairs-elpidio-quirino/.


examination of our own translation of the original document (in photostat) it

will be seen that Maxwell and Gibson, the English authors on whose text the

decision of Mr. Justice Mackaskie was based, have changed the language so

as to make the document a grant cession instead of lease, as it really was,

and as the word “padjak” in the original really means. In view of this vital

divergence from the original text, I do not find myself able to give full faith

and credit to the opinion of Mr. Justice Mackaskie in the famous case in 1939

in Sandakan.” 55

In a letter addressed to Vice President and Secretary of Foreign

Affairs Elpidio Quirino, dated February 27, 1947, Harrison explained


In reviewing the subject of the claims of the Sultanate of Sulu to their ancient patrimony in North Borneo, one must come to the conclusion that the action of the British Government in announcing on the sixteenth of July [the annexation of North Borneo to the British Crown], just twelve days after the inauguration of the Republic of the Philippines, a step taken by the British Government unilaterally, and without any special notice to the Sultanate of Sulu, nor consideration of their legal rights, was an act of political aggression which should promptly be repudiated by the Government of the Republic of the Philippines. 56

To conclude, the Malaysian claim to Sabah, based on the British

claim, is not sustainable. The territory was only leased as the

  • 55 Ibid.

  • 56 Ibid.


British North Borneo Company and not ceded as the Great

Britain, and later Malaysia, have claimed.



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