Malaysia Pays RM5300 Yearly Rental For Sabah to The Sulu Sultanate

Posted: December 2, 2008 in Malaysia, Malaysian Politics, North Borneo, Philippines, Sabah, Sabah Claim, Sabah Politics, Sultan of Sulu, Suluk


Do you know that the Malaysian Government pays RM5300 per year as rental for Sabah to the Sulu Sultanate heirs? They don’t call it rental or lease but call it cession money.  The Malaysian Government has been paying this cession money of RM5300 annually to the Sulu Sultanate since the formation of the Malaysian Federation in 1963.

Lets get a little inside to see how this lease/rental/cession came about.

Historically, the Sultanate of Sulu was recognized as a sovereign state in 1457 and it encompassed portions of Mindanao in the east to North Borneo to the west and south and Palawan in the north. Evidently, The Sultanate of Sulu was granted the territory of North Borneo by The Sultan of Brunei as a gift for helping the Sultan of Brunei against his enemies.

In 1878, Baron Von Overbeck, an Austrian and his British partner Alfred Dent, representing British East India Co later known as The British North Borneo Co. leased the territory of North Borneo from the Sultanate of Sulu by way of an agreement. The agreement was executed on June 22, 1878  and signed between Sri Paduka Maulana Al Sultan Mohammad Jamalul Alam – representing the Sultanate as owner and sovereign of Sabah on one hand, and that of  Baron Von Overbeck and Alfred Dent, representing the British East India Co on the other as lessee of Sabah.  In return,  the British North Borneo Company will provide arms to the Sultan of Sulu to resist the Spaniards, and pay 5,000 Malayan dollars annual rental based on the Mexican dollars value at that time or its equivalent in gold.

After 1930, the British North Borneo Co was not paying the RM5000 to the Sultanate of Sulu as they were not sure who the heirs of Sultanate of Sulu were. In 1939, a group of heirs of the Sultan filed a suit in the High Court of North Borneo against the Government of North Borneo and the British North Borneo Company for the recovery of the stipulated annual payments.

The High Court Chief Justice McKaskie, rendered judgment in favor of the heirs on December 18, 1939. Justice McKaskie had handed ownership of North Borneo to the heirs of the Sultanate and upheld the validity of the claim of the heirs.

This lease has been continued up to this day. Malaysian Government pays rental of RM 5,300 per year – a RM300 increased from original rent.

The lease agreement is definitely a proof otherwise there will be no basis for any agreement if such ownership was not established at all.

But, Foreign Minister Rais Yatim is saying the payment of RM5300 annually is merely assumed as a civil judgement. He said it has no effect whatsoever because through the Cobbold Commission, Sabah and its people had made a collective decision and want to be part of the Malaysian Federation. Hence, the payment would not be a basis to claim Sabah. The Minister also said that any claims by the Sulu Sultan or any other quarters would not be entertained. He said, it must be stressed that Sabah is part of the Federation of Malaysia and that its sovereignty and independence is honoured by all.

We can own a land but not a nation through a piece of paper.

Let the people of Sabah decide on their own destiny, not the Sultanate of Sulu, The Philippines has no credibility to export democracy.


  1. I have said in the papers n social media, my interview with TV3, questions in Parliament that we have stopped payment n the reason behind why we paid the money!! Dr Edwin is talking as an opposition to gain political mileage cos he asked in assembly. Why asked in the assembly when the Foreign Minister of Malaysia had answered those questions? Put politics aside,talk for Sabahan’s interest NOT PERSONAL INTERESTS. I have had meetings with the former Foreign Sec n the the outgoing President of the Philippines on this issue. Also some facts I revealed many times in the forum of my meetings.
    Bottom line is “we don’t acknowledge or entertain any claims whatsoever from any parties on Sabah” as we are a Sovereign State n part of Malaysia.
    The more you entertain it will amount to you tacid recognition of their claims. I am handling it n in so far as Malsysia is concerned there is NO dispute on the Soverignity of Sabah!!!. The least we speak about it the better but it does not mean we are not doing anything!

    👆🏻From Foreign Minister Datuk Seri Anifah Aman on the RM5300 annual payment to Philippines


  2. Way cool! Some very valid points! I appreciate you writing this post and
    the rest of the site is also really good.


  3. “The indigenous people of Sabah happen to be the Kadazandusuns and the Muruts, who consist of the Bonggis (Banggi island, Kudat), the Idaan/Tindals (Tempasuk, Kota Belud), the Dumpaas Kadazans (Orang Sungai, Kinabatangan), the Bagahaks (Orang Sungai, also Kinabatangan), the Tombinuo and Buludupis Kadazans (Orang Sungai, also Kinabatangan), the Kimaragang Kadazans (Tandek and Kota Marudu), the Liwans (Ranau and Tambunan), the Tangaah Kadazans (Panampat and Papar), the Rungus (Matunggong and Kudat), the Tatanah Kadazans (Kuala Penyu), the Lotuds (Tuaran), the Bisayas (Beaufort), the Tidongs (Tawau) and the Kedayans (Sipitang). Then there are the Muruts who consist of the Nabais, Piluans, Bokans, Taguls, Timoguns, Lundayehs, Tangaras, Semambus, Kolors and Melikops.

    These are the indigenous communities of Sabah, and if anyone has a right to the land of Sabah it ought to be them. Nobody denies that Bruneians, Suluks, Ilanuns, Bugis, Malays, Chinese, Indians, Arabs and other communities have resided in Sabah too in the past, but the latter came from other kingdoms and polities, and in the case of the Bruneians and Suluks of Sulu, they also happened to be outsiders who imposed their dominance over the indigenous people of Sabah.” Dr. Farish A. Noor


  4. CelikAkal says:

    The Sulu lost soverignty and was dissolved by way of history when Spain invaded the Philippines then handed Sulu and its territories to North Borneo Company which belonged to Great Britain (Refer Madrid Protocol 1885). Then Cobbold Commission made the 1963 Election wereby SABAH PEOPLE agreed to join Malaysia. Hence, Sabah is a Malaysian State eversince.

    To quote wikipedia;

    As reported by the Secretary-General of the United Nations, the independence of North Borneo was brought about as the result of the expressed wish of the majority of the people of the territory in a 1963 election. This is further reinforced by the International Court of Justice view that,

    “…historic title, no matter how persuasively claimed on the basis of old legal instruments and exercises of authority, cannot – except in the most extraordinary circumstances – prevail in law over the rights of non-self-governing people to claim independence and establish their sovereignty through the exercise of bona fide self-determination.”

    ‘Cession money‘ ialah bayaran penyerahan, dan bukan bayaran sewa. Selain Sabah, terdapat wilayah-wilayah lain di dunia yang diserahkan (ceded) dengan bayaran, contohnya:

    1. Louisiana, diserah oleh Perancis kepada Amerika Syarikat dengan bayaran berjumlah USD15 juta, atau kurang USD0.03 seekar.

    2. Alaska, diserah oleh Russia kepada Amerika Syarikat dengan bayaran USD7.2 juta, atau USD0.02 seekar.

    ces·sion /ˈseSHən/ Noun – The formal giving up of rights, property, or territory, esp. by a state.
    Synonyms: surrender – transfer – assignment

    Sepanyol, yang menguasai wilayah-wilayah Kesultanan Sulu ketika itu, telah menandatangani perjanjian dengan Jerman dan Great Britain pada 7 Mac 1885 untuk melepaskan segala tuntutan terhadap kedaulatan Sabah:

    Article 3

    The Spanish Government relinquishes as far as regards the British Government, all claim of sovereignty over the territories of the continent of Borneo which belong, or which have belonged in the past, to the Sultan of Sulu (Jolo), including therein the neighboring islands of Balambangan, Banguey and Malawali, as well as all those islands lying within a zone of three marine leagues along the coasts and which form part of the territories administered by the Company styled the ‘British North Borneo Company’.

    (Kerajaan Sepanyol melepaskan kepada Kerajaan British, semua tuntutan kedaulatan ke atas wilayah-wilayah benua Borneo yang dimiliki, atau yang telah dimiliki pada masa lampau, oleh Sultan Sulu (Jolo), termasuk pulau-pulau Balambangan, Banguey dan Malawali yang berhampiran, dan semua pulau-pulau yang berada di dalam zon tiga liga marin di sepanjang pesisir pantai dan membentuk sebahagian wilayah yang ditadbir oleh Syarikat yang digelar ‘British North Borneo Company‘.

    Keempat, Kesultanan Sulu dianggap telah tamat sebaik sahaja Sultan Jamalul Kiram II menandatangani Perjanjian Carpenter pada 22 Mac 1915, yang menyerahkan segala kuasa politik beliau kepada Amerika Syarikat.


  5. Anonymous says:

    MILF +MNLF+ABU SAYAFF+TAUSUG’s= Royal Army of the Sultanate of Sulu… Malaysia cannot sustain a guerilla warfare against this bandit group of their own making…..
    The USA (VFA )+ Phillipine Army combined has never subdued this people for decades(Malaysia being the financiers of course in support of their Moslem brothers in the Philippines’ south, to hide the real issue. The Sabah claim..) as a proof Malaysia is paying monthly rent to the Sultan of their illegal occupation….
    Legendary Tausug warrior/rebel and founder of the Moro National Liberation Front (MNLF), Nur Misuari warns Malaysia…he has this to say….
    “If one drop of their blood is spilled, we might be forced to come to their aid,” ” they are our brothers at arms”…. expect heavy bombings in Sabah…


  6. rajah sulaiman says:

    Why are Malaysian’s ashamed to pay the proper rent to
    the Sultanate of Sulu? Even The United states of America pays annual rent for occupying a portion a poor country in Cuba.
    “(Reuters) – The United States pays Cuba $4,085 a month in rent for the controversial
    Guantanamo naval base, but Cuba has only once cashed a check in almost half a
    century and then only by mistake, Fidel Castro wrote in an essay published on Friday.”


  7. john says:

    BN is cautious because there is a ‘fixed deposit’ of hundreds of thousands of Muslim Filipinos in Sabah who have been given blue ICs and native status and helped put BN in power.

    Any wrong move could jeopardise this ‘fixed deposit’ in the coming GE.

    Another political move is that with this ‘standoff’, BN can mobilise and station thousands from the army and from Rela to the so-called ‘hot spots’ to act as a vote bank in Pakatan strongholds.


  8. confuse says:

    I wonder why Hishammuddin is so eager to end this intrusion without bloodshed whereas thousands of peaceful Malaysians were bashed during the Bersih rallies.


  9. paitan says:

    The Suluk Muslims know that the Malaysian government won’t dare to send them back to the Philippines because it has been secretly supporting and helping all those Muslim groups in southern Philippines to fight against Philippine government for centuries.

    Therefore they are brave to come here in hundreds with weapons and believe me, they won’t go away. More are coming to Sabah to stay and they will get their ICs soon.


  10. gogglee says:

    This group is a standby; if and when BN loses the general election, they will cause havoc and then the premier will find an excuse to declare an emergency. They could be mercenaries paid by the richest man in Malaysia.


  11. trouble says:

    Maybe this is actually planned by Umno to frighten the Sabahans to vote for BN. That is why Hishammuddin is doing nothing to deport them.


  12. not happy says:

    My intuition tells me that there is a hidden agenda behind this intrusion. There is a frightening silence from the ruling party and the relevant authorities.


  13. lanun says:

    What’s all the fuss about? These armed men are the representatives of the landlord of this real estate to whom we pay rental.

    These men are here to check if the property should be further leased or else they will repossess it and lease it to a new tenant. Check out this


  14. Arnold says:

    My intuition tells me that there is a hidden agenda behind this intrusion. There is a frightening silence from the ruling party and the relevant authorities.


  15. joe says:

    If they are unarmed, why would there be bloodshed? If they are armed, why are they allowed to stay in Sabah, as obviously there is malicious intent?


  16. zul says:

    Malaysians are not barbarians like the President George Bush’s army that invaded Iraq which had blood on their minds. If we can solve the situation with diplomacy, why the need to use force?


  17. Boy, there are over a million plus in Sabah and they have invaded a long time ago when Mahathir was Prime Minister of Malaysia.


  18. boy says:

    Is it 100 or 400 or 4,000 men? What is the actual number of people invading us?


  19. storm says:

    It strikes me as strange that we have immigration checkpoints and if a person does not have a passport, or they have a passport/visa, etc, but they do not clear the checkpoint for a variety of reasons such as drug trafficking or arms smuggling, they would not be deported, but probably arrested and charged with offences ranging from illegally carrying firearms or worse, drug trafficking.

    Hence, many Malaysiakini commentators are correct to raise the concern – you have a bunch of militants coming into a Malaysian village without clearing immigration, why haven’t the law been enforced against them?

    The officials already said they are armed, hence if they haven’t enforced the law, this is in effect a stand-off. I say this is no longer within Hishammuddin’s pay-grade to handle, but for the PM to handle.

    How our PM can still be going around attending signing ceremonies instead of being in the ‘war room’ when there’s an incursion into Malaysian territory is beyond comprehension.


  20. Hiew says:

    From news reports, it looks like Defence Minister Zahid Hamidi has washed his hands off this issue as only Home Minister Hishammuddin Hussein is doing the talking. No matter how quiet he remains, this is an issue for the defence minister to answer.


  21. JJ says:

    Where is our defence minister? Our borders have been breached by a group of armed intruders.

    What has happened to our armed forces? We are supposed to have high-tech surveillance aircraft and super-duper Scorpene submarines and yet they cannot detect this group of insurgents?

    I believe this is a group of no ordinary armed people – they are testing our line of defence and may possibly be an advance group for bigger things to come in the future.

    We, the rakyat want some answers and we want it quick.


  22. Joe Fernandez says:

    Sovereignty rests with the people. This nonsense about the Philippines owning Sabah should stop.

    The westerners found early on that their idea of territory and land ownership was not as practised by many other cultures especially the Islamic, the Maori and Indians (America).

    The Indians in Manhattan probably thought that they had gone one up on the Palefaces when the latter agreed to give them a handful of coloured glass beads for the island. Coloured glass beads were valued in all tribal societies.

    In American Indian culture as in other tribal nations, no one could possibly own land since it could not be carted away like other material and worldly posessions. So, land could only be owned by the people.

    The situation was similar in New Zealand, another example.

    It was only when the whites began fencing off land that they had “bought” from the Maoris that the troubles began. In Maori culture it was unthinkable to deny anyone access to land.

    The whites also had trouble with the Indians in America when they began fencing off land which they had “bought” or “stolen” from the Natives and began killing off the bison which was life itself to them.

    The entire land area of America belonged to the Indians, based on their Adat, but in a collective (families) and/or communal (people) sense.

    This is similar to the situation in Sabah. Hence, the decision by the Government to issue Communal Titles and not individual titles. The Government should issue Collective Titles as well to eligible claimants.

    If I am ventilating any ignorance at all here on individual NCR titles, I would welcome an explanation from subject matter experts.

    The Palestinians, especially those in the west, sold land they did not “own” to Jewish settlers.

    The Ottoman Empire did not recognise land in Palestine as belonging to the Palestinians or individuals. They had no titles to the land, whether collective, communal or individual. They were defenceless in the face of British colonialism which was publicly supportive of the Palestinians in some sort of vague undefined way but either did not or could not stand in the way of returning Jews determined to build the world’s only theocratic state.

    It was only when the Jews moved towards setting up a state that the Palestinians demanded “their land” back. Then the troubles began with the birth of Palestinian nationalism, defined by opposition to Jews owning land in the Holy Land. The Jews pointed out that they were the original owners of the land before they were expelled by the Roman Empire and cast into the Diaspora.

    In Sabah, what the Brunei and Sulu sultans reserved for themselves was the right to collect toll along the waterways. Their respective Kerajaan Sungei was not defined by secure borders with territory.

    What the Brunei and Sulu sultans transferred to the Company in Sabah was the right to collect toll along the waterways.

    In the case of the Sultan Sultan, the transfer was not free. The Sultan is entitled to collect RM 5, 000 per annum in perpetuity in return for the Company collecting the tolls. This is a sum still being paid every year by the Malaysian Government to the nine heirs of the last Sulu Sultan although no tolls are being collected.

    The Brunei and Sulu sultans did not cede any territory in Sabah to the Company because they had no such land to cede. The land area of Sabah and its waters belonged to the Orang Asal Nation collectively and communally.

    In Peninsular Malaysia, the British found it unthinkable that the Bugis Sultans had no territory to rule and confined themselves to collecting toll along the waterways.

    The British stopped the toll collection in return for a yearly purse, drew territorial borders for the Sultans and defined their “new” sultanates after the main waterways. Hence, Selangor after Sungei Selangor, Perak after Sungei Perak, Pahang after Sungei Pahang, Johore after Sungei Johor etc etc

    The British also stopped the payment of bunga mas and perak to Bangkok after fighting two wars with Siam to hack away the southern half of the Kra Peninsula — or the Malay Peninsula — from the Thai kingdom. The bunga mas and perak were rent payable by the people, represented by the Sultans, to the Thai king for squatting on his land which stretched all the way to Tumasik (Singapore).


  23. Anonymous says:

    the weakest army in southeast asia – the phillipines should think twice if they want to launch another ganyang malaysia military campaign style .. Sabah belong to Malaysia eternally.


  24. Thanks for your blog, It’s excellent.


  25. Anonymous says:

    Why does Malaysia doesn’t like to accept the challenge of Philippines in the International Court of Justice regarding the righful owner of Sabah?


  26. joseph says:

    Why dont we all agree that sabah belongs to the sultanate of sulu and sulu belongs to the republic of the philipines.As easy as that.


  27. brandon gibran obon says:

    Whatever we say, sabah still belongs to the republic of the Philppines, however i agree that Sabah sholuld remain as part of the federal state of Malaysia. Since Philippine Government corrupt official may ruin the progress of this majestic place.


  28. Anonymous says:

    Malaysia is playing hypocrite and greed regarding the possession of Sabah,although succeeded in politically maneuvering the sovereign territorial boundary, there is no doubt that ownership of Sabah belongs to the Sultanate of Sulu people as ff.

    1. There is an 1878 contract lease from British North Borneo Company between Sultanate of Sulu.
    2. This contract of lease is transferred to British Crown Colony without the consent of the Sultanate of Sulu and continue to pay the rental.
    3.British Colony transferred the lease to Malaysian Federation and again without the consent of the owner.
    4. Malaysia is continuing to pay the 1878 lease rental to the Sultanate of sulu to this day.
    5. UN allowed only 100 years of international lease even if the previous maneuver has succeed,which must lapse 1978,this therefore poised another legal question since Malaysia got independence only in 1963.
    6. The above are recorded history as the clear evidence that cannot be disputed ,therefore the biggest landgrabber in the world history is Malaysia.
    7. There is a court ruling of the British Crown in 1939 explicitly stating the ownnership of North Borneo by the Sultanate of Sulu by appointing and acknowledging the administrator Punjungan Kiram,the son of Sultan Mawalil Wasit of the Sultanate of Sulu,this grand truth will be the biggest blunder of Malaysia . It will be only a matter of short time that shame will fall in the face of Malaysia.

    Hope this will help Malaysia to think deeper,no amount of bribe is possible to cover the truth as then Sultan Agong has express – How long we will keep paying people to cover this? Can we remove the rights of the Sultanate people forever over their owned property?


  29. […] Thank you Razak for the interest and for creating the spark in me to respond to your time taken email in respect to my 2 articles  When Will Philippines Drop The Sabah Claim? and Malaysia Pays RM5300 Annual Rental For Sabah to The Sultanate of Sulu . […]


  30. Joshua Kong says:

    This is another deception from the beginning.

    This is NOT the rental or whatever on Sabah..

    so little on Sabah, and actually for the compensation loss of two businesses -sea foods collection and bird nest collection on Sandakan.

    PERIOD- Sabah belongs to Sabahans forever and forever AMEN.


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