UAE's IPIC takes Malaysia's 1MDB dispute to London court, seeks US$6.5 billion

A construction worker talks on the phone in front of a 1MDB billboard at the Tun Razak Exchange development in Kuala Lumpur, on Feb 3, 2016.
A construction worker talks on the phone in front of a 1MDB billboard at the Tun Razak Exchange development in Kuala Lumpur, on Feb 3, 2016.PHOTO: REUTERS

DUBAI (REUTERS) - Abu Dhabi's state-owned International Petroleum Investment Co (IPIC) has asked a London court to arbitrate in a dispute with Malaysian state fund 1Malaysia Development Berhad (1MDB), in which it is claiming about US$6.5 billion (S$8.8 billion), IPIC said on Tuesday (June 14).

The submission to the London Court of International Arbitration alleges that 1MDB and Malaysia's finance ministry (MOF) failed to perform their obligations under a debt restructuring agreement involving the companies last June.

"The failure of 1MDB and MOF to perform their obligations, cure their defaults or put forward acceptable proposals has left IPIC in the position where it must pursue its claims in arbitration," IPIC said.

Malaysia's finance ministry dissolved 1MDB's board of advisers and took over its remaining assets last month. The fund is the subject of money-laundering investigations in at least six countries.

In response, 1MDB on Tuesday said in a statement the fund and its legal counsel would "review the request for arbitration once it has been served with a copy". "1MDB reiterates that, notwithstanding the dispute with IPIC, it has a strong liquidity position and is able to honour its current debt obligations," the statement added.