As part of this agreement, signed by the Governor of Mindanao and Sulu Frank W. Carpenter, appointed by the United States, with the Sultan of Sulu, the right of the sultan and his heirs to temporal sovereignty, tax collection and arbitration laws was abandoned. At its peak, it stretched over the islands that bordered the western peninsula of Mindanao east of Palawan to the north. It also included the northeastern area of Borneo, which stretched from Marudu Bay to Tepian Durian (in present-day Kalimantan).   Another source stated that the area was extended by Kimanis Bay, which also crosses the borders of the Sultanate of Brunei.  After the arrival of Western powers such as the Spanish, British, Dutch, French, Germans, Sultan-Talassokratietie and sovereign political powers, they were abandoned by an agreement with the United States in 1915.   In 1962, the Philippine government, led by President Diosdado Macapagal, officially recognized the persistence of the Sulu sultan.  On May 24, 1974, Acting Sultan Mohammed Mahakuttah Kiram began and lasted until 1986. He was the last officially recognized Sulu Sultan in the Philippines after being recognized by President Ferdinand Marcos.
The dispute is based on a Philippine territorial claim since the days of President Diosdado Macapagal over much of malaysia`s eastern sabah. Sabah was known as North Borneo before the founding of the Malaysian association in 1963. The Philippines asserts, with regard to the inheritance of the Sultanate of Sulu, that Sabah was leased only to the British North Borneo Company, and that the sultanate`s sovereignty was never abandoned. The dispute stems from the difference in interpretation of an agreement signed in 1878 between Sultanate Sulu and the British Traders` Union (Alfred Dent and Baron von Overbeck) which provided that North-Borneo was either sold to the British charter company or leased (according to the translation used) for payment of $5,000 per year. Malaysia regards the dispute as a “non-subject” because it considers the 1878 agreement not only as a surrender, but also considers that the inhabitants exercised their act of self-determination when they joined the Malaysian Federation in 1963.   As reported by the Secretary-General of the United Nations, the independence of North-Borneo was achieved on the basis of the explicit wishes of the majority of the territory`s population, supported by the results of the Cobbold Commission.  The Carpenter Agreement was adopted on March 22, 1915, by which the Governor General of the Philippines recognized the Sultan of Sulu (Hadji M.