The seizure of assets relates to a $15bn legal dispute over an agreement signed by the sultan 144 years ago.
Malaysian state oil company Petronas has said it would defend its legal position after two of its subsidiaries were seized in Luxembourg.
The units were seized by the descendants of a late sultan, escalating a $15 bn legal dispute linked to an agreement signed 144 years ago, the Financial Times reported earlier, citing lawyers.
The company said on Tuesday its Petronas Azerbaijan (Shah Deniz) and Petronas South Caucasus units were on Monday served with “Saisie-arret”, essentially a seize order by court bailiffs in Luxembourg.
Petronas said the action taken against it was “baseless”. It added that the units had previously divested their assets in Azerbaijan with the proceeds already repatriated.
The seizure follows a French arbitration court ruling in February, ordering Malaysia to pay $14.9 bn to the heirs of the last sultan of Sulu, to honour a deal he signed in 1848 with a British trading company over the use of his territory, now known as the Malaysian state of Sabah.
Malaysia took over the arrangement after independence from Britain, paying a token sum to the heirs annually.
But the payments were stopped in 2013, with Malaysia arguing that no one else had a right over Sabah, which was part of its territory.
Malaysian Prime Minister Ismail Sabri Yaakob in March pledged to fight the French court ruling, saying his government would not entertain anyone else’s claim over the state.
Follow Al Jazeera English: