A Historical Discourse of the Philippine Claim over Sabah

By Amando Respicio Boncales, B.A., M.S.Ed., M.A., (PhD).

Northern Illinois University
arboncales.niu.edu
May 2013

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 (1961-1965) based on historical and legal

claims. President Ferdinand Marcos assumed presidency in 1965. His alleged Jabiddah plan,

1
Senator Miriam Defensor-Santiago, “Sabah Issue In International Law,” News, Philippine Daily Inquirer, March
23, 2013, http://opinion.inquirer.net/49361/sabah-issue-in-international-law.

1
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 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

2
Erwin S. Fernandez, “Philippine-Malaysia Dispute Over Sabah.” Asia-Pacific Social Science Review, vol. 7, no. 1
(2007) : 53.
3
Michael Leifer, The Philippine Claim to Sabah (Ag Zug: Inter Documentation Co., 1968), 48.
4
Ibid., 73.

2
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 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

5
Ibid., 73, 74.
6
Fernandez, “Philippine-Malaysia Dispute Over Sabah,” 683-84.

3
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

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

7
M. O. Ariff, The Philippines Claim to Sabah: Its Historical, Legal and Political Implications (Singapore: Oxford
Univ. Press., 1970), 64.
8
BERNAMA, “LAHAD DATU: Historians Agree Sabah Rightfully Belongs to Malaysia,” March 6, 2013, News,
http://www.nst.com.my/latest/font-color-red-lahad-datu-font-historians-agree-sabah-rightfully-belongs-to-malaysia-
1.229872.
9
FreeMalaysiaToday.com, “There Was No Sabah Referendum,” March 8, 2013,
https://www.freemalaysiatoday.com/category/nation/2013/03/08/there-was-no-sabah-referendum/.
10
Ariff, The Philippine Claim to Sabah, 64.

4
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 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

5
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 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

11
Nicholas Tarling, Sulu and Sabah: A study of British policy toward the Philippines and North Borneo (Kuala
Lumpur: Oxford University Press, 1978), 127.
12
“PROTOCOL OF 1885,” http://www.lawnet.sabah.gov.my/Lawnet/SabahLaws/Treaties/Protocol(Madrid).pdf.
13
Lela Gamer Noble, Philippine Policy Toward Sabah: a Claim to Independence (monograph No 33) (Tucson,
Ariz: Assn for Asian Studies Inc, 1977), 8.

6
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

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

cooperation.

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

7
 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 18th century followed a historical pattern of ceding and

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

15
Ibid., 566.
16
Ibid., 554-67.
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.

8
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

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

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.
20
Ibid., 265.

9
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 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
21
Tarling, Sulu and Sabah, 349.
22
Ibid., 349.
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.

10
known as Pajak of 1878. The BNBC was barred from acquiring sovereignty by its private status

and by the terms of its charter.26

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 will focused on the

26
Leifer, The Philippine Claim to Sabah, 1.
27
Miriam Defensor-Santiago, “Sabah Issue In International Law,” News, Philippine Daily Inquirer, March 23,
2013, http://opinion.inquirer.net/49361/sabah-issue-in-international-law.

11
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 15th and 16th 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.

12
 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 between their respective

subjects served to reinforce this relationship even more.

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

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.

13
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. 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 Great 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)

31
W. H. Treacher, British Borneo: Sketches of Brunai, Sarawak, Labuan, and North Borneo (Singapore: Govt.
print. dept, 1891), 5. Stable Url http://archive.org/stream/yonderyo00gavarich/yonderyo00gavarich_djvu.txt.
31
32
Official Gazette of the Republic of the Philippines, “The Earl of Derby to Lord Odo Russell,” January 1876,
http://www.gov.ph/1876/01/17/philippine-claim-to-north-borneo-vol-i-the-earl-of-derby-to-lord-odo-russell/.

14
 Almost two decade before the dissolution of the East Indian Company, an Englishman

named James Brooke33 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

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

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.

15
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 12th 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.

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.

16
 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.

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

36
K.G. Tregonning, A History of Modern Sabah, 1881-1963 (Kuala Lumpur: University of Malaya Press, 1965), 13-
14.
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, http://www.gov.ph/1947/02/27/letter-of-francis-b-harrison-
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.

17
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

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

38
Ibid., 14.
39
Tregonning, A History of Modern Sabah, 16.

18
Sultan of Brunei 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 a sole witness to the transaction. Unlike in the Brunei

grants of the previous year, Treacher’s recommendation were accepted by the Sulu Sultan,

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, http://www.gov.ph/1878/07/04/philippine-claim-to-north-borneo-vol-i-friendly-letter-from-our-brother-the-
paduca-majarasi-maulana-sultan-mujamad-dehamalul-alam-addressed-to-his-brother-his-excellency-the-governor-
captain-genera/.

19
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.

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

41
Ibid.

20
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 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
42
Official Gazette of the Republic of the Philippines, “II. Statement at the Opening Meeting of the British-
Philippine Talks,” January 28, 1963, http://www.gov.ph/1963/01/28/philippine-claim-to-north-borneo-vol-i-ii-
statement-at-the-opening-meeting-of-the-british-philippine-talks/.

21
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 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 place?

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

43
Nestor M. Nisperos, Philippine Foreign Policy on the North Borneo Question (Pittsburg: University of Pittsburgh
Press, 1969), 134.
44
Ibid.

22
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

45
Ibid.

23
 and Brunei, with whom Great Britain has had Treaties of Peace and Commerce.46
[Emphasis Added]

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.

46
Official Gazette of the Republic of the Philippines, “Earl Granville to Mr. Morier,” January 7, 1882,
http://www.gov.ph/1882/01/07/philippine-claim-to-north-borneo-vol-i-earl-granville-to-mr-morier/.
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, http://www.gov.ph/1878/12/02/philippine-claim-to-north-borneo-vol-i-
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-o/.

24
 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 the respective boundaries, the United States did

not cede or waive anything to the British Crown.

48
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, http://www.gov.ph/1947/02/27/letter-of-francis-b-harrison-
to-vice-president-and-secretary-of-foreign-affairs-elpidio-quirino/.

25
 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 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;

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

26
 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 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 incorrect.

51
Ibid.

27
 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 justice52 The ruling was made on the

shares entitled by each claimant. 53

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

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),
http://www.bodley.ox.ac.uk/dept/scwmss/wmss/online/blcas/macaskie-cfc.html.
53
Rodolfo C. Severino, Where in the World Is the Philippines? Debating Its National Territory (Singapore: Institute
of Southeast Asian Studies, 2011), 62.

28
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 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 that:

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

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, http://www.gov.ph/1947/02/27/letter-of-francis-b-harrison-
to-vice-president-and-secretary-of-foreign-affairs-elpidio-quirino/.
55
Ibid.
56
Ibid.

29
 To conclude, the Malaysian claim to Sabah, based on the British claim, is

not sustainable. The territory was only leased as the British North Borneo

Company and not ceded as the Great Britain, and later Malaysia, have claimed.

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