MALAYSIAN state oil company Petronas said on Tuesday 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 billion legal dispute linked to an agreement signed 144 years ago, the Financial Times reported earlier, citing lawyers.

The company said 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 Azerbajian with the proceeds already repatriated.

The seizure follows a French arbitration court ruling in February ordering Malaysia to pay $14.9 billion 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 vowed to fight the French court ruling, saying his government would not entertain anyone else's claim over the state.