Malaysia to appeal against UK court decision to put on hold suit between 1MDB and Abu Dhabi state fund

A court in London had on May 20, 2019, put on hold a suit between 1MDB and Abu Dhabi's state fund for further arbitration.
A court in London had on May 20, 2019, put on hold a suit between 1MDB and Abu Dhabi's state fund for further arbitration. PHOTO: ST FILE

KUALA LUMPUR (BLOOMBERG) - Malaysia is seeking to appeal against a London court decision that put on hold a suit between 1MDB and Abu Dhabi's state fund for further arbitration, saying the matter is of public importance.

The Finance Ministry and its troubled state fund 1Malaysia Development Berhad (1MDB) filed an application with the UK Court of Appeal to seek permission to challenge the order, Malaysia's Attorney-General Tommy Thomas said in a statement on Thursday (May 30).

The London court's decision for further arbitration was "not satisfactory to Malaysia" as it meant the case would be determined without public scrutiny, he said.

A court in London granted a "temporary" stay of "indefinite duration" over Malaysia's claim that its agreement to the US$5.78 billion (S$7.97 billion) settlement with IPIC should be overturned, according to a ruling by Judge Robin Knowles on May 20.

The stay would allow a second round of arbitration, brought by IPIC and its Aabar Investment unit against 1MDB, to go ahead.

If Malaysia succeeds in the UK action, it said it can proceed to seek recovery of US$3.5 billion that was paid by 1MDB subsidiaries to an IPIC subsidiary, or reduce its liability to pay interest and principal under bonds jointly guaranteed by IPIC up to that same amount.

The country alleges that the agreements were made by former prime minister Najib Razak as part of a "conspiracy to defraud", Thomas said.

 

"These proceedings are steps to recover substantial amounts of money wrongfully paid by the Najib administration," he said in the statement. "The government remains single-mindedly focused in its attempts to ensure that Malaysia's assets are recovered."

Najib, who is on trial for criminal charges linked to 1MDB, has consistently denied any wrongdoing.