Representatives of the heirs of the last Muslim sultan of Sulu, who claimed to own land in what is now the oil-rich Malaysian state of Sabah, said bailiffs in Luxembourg seized the holding companies on behalf of their clients on Monday. Luxembourg-registered subsidiaries Petronas Azerbaijan (Shah Deniz) and Petronas South Caucasus managed the state energy company’s interests in Azerbaijan and could be worth more than $2 billion. The move, which is being reported for the first time, is part of legal efforts launched in 2017 by Sulu heirs to win compensation for land in Sabah they said their ancestor leased to a British trading company in 1878, before the discovery of vast natural resources in the area. In March, an arbitrator in France ruled that Malaysia, which inherited the obligations of the lease after gaining independence from Britain, must pay the descendants $14.9 billion. The case, which until now has received little attention outside Malaysia, has been described by experts as one of the most unusual arbitration proceedings in history. It has sparked outrage in Malaysia, which still refuses to accept the award, while also exposing Britain’s messy colonial legacy in the country. Now Petronas has been dragged into the controversy, just as it was set to capitalize on high oil prices and help rebuild Malaysia’s economy after the coronavirus pandemic. Colin Ong, a prominent arbitration lawyer not involved in the case, said it appeared to be unprecedented in the history of the 1958 New York Convention on International Arbitration, to which Malaysia is a state party. “It’s very unusual. . .[It involves]an agreement that precedes the formation of a country,” Ong said. “This case is the history of colonialism,” said Elisabeth Mason, a London-based lawyer at 4-5 Gray’s Inn Square and lead counsel for the eight plaintiffs, who are based in the Philippines. “Unlike so many displaced people, our clients have had a contract going back to 1878 and therefore have a path to justice where many others did not.” The seizures come at a critical time for Malaysia, which has had four prime ministers since 2015 when it was rocked by revelations of massive embezzlement by its sovereign wealth fund 1MDB. Petronas has reportedly been placed at the center of the government’s efforts to rein in mounting debt. After the war in Ukraine sent oil prices soaring, Malaysia’s finance minister told the Financial Times the boom could help the country improve its balance sheet.

But as long as Kuala Lumpur continues to ignore the ruling, the money owed to the Sulu heirs is set to increase. The arbitrator in France ruled that for every year unpaid, Malaysia’s outstanding liability to the heirs would increase by 10%. In February, Petronas’ Luxembourg holding companies liquidated a 15.5% stake in Azerbaijan’s Shah Deniz offshore gas field, previously valued at $2.3 billion. It is not clear whether this money is now held by the subsidiaries or by Petronas in Malaysia. Lawyers for the plaintiffs have said they will seek more government assets if no settlement is reached. “International law does not let you choose. “Either Malaysia honors its international obligations or it goes ‘full Russia,’” said Paul Cohen, the other lead counsel for the claimants at 4-5 Gray’s Inn Square. “We hope Malaysia will see the cost of being a legal pariah state and come to terms.” Malaysia’s foreign ministry did not immediately respond to a request for comment.