North Borneo dispute

The North Borneo dispute is the territorial dispute between the Federation of Malaysia and the Republic of the Philippines over much of the eastern part of the state of Sabah, a territory known as North Borneo prior to the formation of the Malaysian federation. The Philippines, presenting itself as the successor state of the Sultanate of Sulu, retains a "dormant claim" on Sabah on the basis that the territory was only leased to the British North Borneo Company in 1878, with the sovereignty of the Sultanate (and subsequently the Republic) over the territory never having been relinquished. However, Malaysia considers this dispute as a "non-issue" as it interprets the 1878 agreement as that of cession and that it deems that the residents of Sabah had exercised their right to self-determination when they joined to form the Malaysian federation in 1963.

On 22 January 1878, the Sultanate of Sulu and a British commercial syndicate made up of Alfred Dent and Baron von Overbeck signed an agreement, which, depending on the translation used, stipulated that North Borneo was either ceded or leased to the British syndicate in return for a payment of 5000 Malayan Dollars per year. On 22 April 1903, Sultan Jamalul Kiram signed a document known as "Confirmation of cession of certain islands", under which he grant and ceded additional islands in the neighbourhood of the mainland of North Borneo from Banggi Island to Sibuku Bay to British North Borneo Company. The confirmatory deed of 1903 makes it known and understood between the two parties that the islands mentioned were included in the cession of the districts and islands mentioned in 22 January 1878 agreement. Additional cession money was set at 300 dollars a year with arrears due for past occupation of 3,200 dollars. The originally agreed 5,000 dollars increased to 5,300 dollars per year payable annually.

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