Leigh R. Wright in the journal article “Historical Notes on the North Borneo Dispute” published in The Journal of Asian Studies, Vol. 24, No 3 (May, 1966) made some rather interesting and salient points to the discussion. She notes that while the Sulu claim of sovereignty over North Borneo prior to the 1878 treaty with Baron Overbeck is open to dispute“The Philippine government has not produced, and it is doubtful if there is extant, a document by which Brunei granted North Borneo to Sulu. It is only the weight of Sulu tradition which sustains the Sulu claim to ownership of the area.” (Leigh R. Wright, ibid.), there is ample oral and written documentation which proves that Brunei held sway over North Borneo before it was even ceded to the British North Borneo Company. In fact, after the signing of treaties, “[f]ew people seriously questioned the British North Borneo Company’s rights of sovereignty until the Philippines pressed their claim in 1962. Most observers of the last and present century refer to the cession as complete.”Leigh R. Wright, ibid. In any case, she says, the effect of the Madrid Protocol of 1885 signed by Spain and Britain effectively demonstrates that Spain as the colonial power of the Philippines Islands had abandoned all claims that it may have over North Borneo.The British and Malaysian view…is that the Republic of the Philippines is the successor to the United States and Spain in the Philippine Islands. As Spain abandoned her claim to North Borneo in the protocol of 1885, and as a line of demarcation was agreed to by the United States and Britain in 1930, the Philippines could not possibly sustain a claim of sovereignty over North Borneo.” (ibid.)

Thus, she concludes her paper as follows, emphasis are our own.

“North Borneo became British because of the success of British diplomacy in the nineteenth century. It is clear that Britain did not, after the grant to von Overbeck and Dent in January 1878, consider North Borneo a dependency of Sulu, if indeed it had ever been one, as Spain claimed in her treaty with Sulu of July 1878. If confirmation of the von Overbeck-Dent grant were needed as far as Spain is concerned it was inherent in the abandonment of her claim in the 1885 protocol. Thus if North Borneo had been under Sulu as late as 1885 the protocol would have the effect of partitioning Sulu territory between Spain and the British North Borneo Company. This would have been technically possible because Spain as of July 1878, and not the Sultan, held the sovereignty of Sulu and its dependencies. In theory Spain could dispose of any part of Sulu as she wished or as British and German diplomatic pressure indicated.

Whether the correct term for the Sulu grant of North Borneo is lease as the Philippines contend, or cession, is not the central issue of the North Borneo question. Indeed, the question of sovereignty is not the real issue. The fact is that a British sponsored company legally acquired and effectively ruled the territory, and that Sulu and Spain acquiesced in the scheme. An explanation by the British Foreign Office to the government opposition in Parliament that the company held the territory under the suzerainty of the Sultans of Brunei and Sulu quieted opposition to the granting of a royal charter to the British North Borneo Company, but does not negate the contention that sovereignty was effectively held by the company. That was decided in 1885 and confirmed in 1888, in 1930 and in 1946.

Britain and Malaysia have never denied a financial obligation to the descendants of Sultan Mohammad Jamalul Alam with regard to the “cession” money. This is undoubtedly the true issue pending at the present time. It involves questions such as, which of the heirs of the Sultan are entitled to money, should it continue to be paid annually or should a lump sum settle the question. Once the Borneo issue ceases to be a highly charged political question, perhaps the Philippines and Malaysia can settle down to resolving this financial claim, which is the only real point of contention in the Borneo dispute.“

The full text of the article may be downloaded here: Historical Notes on the North Borneo Dispute [.pdf format]