Lawyers representing the registered owner and claimants of the superyacht Equanimity have filed an appeal against last month’s court order to grant the US government custody over the vessel.
A notice of the appeal at the US Ninth Circuit Court of Appeals was filed on Monday at the California Central District Court - the venue where the civil forfeiture suit for the Equanimity is still pending.
“Please take notice that Equanimity (Cayman) Ltd, Equanimity Crew (Cayman) Ltd, Equanimity Lifestyle (Cayman) Ltd, Equanimity Operations & Maintenance (Cayman) Ltd, claimants in this above-captioned case, hereby appeal to the United States Court of Appeals for the Ninth Circuit from an order granting the motion for protective order entered in this action on the 15th day of May, 2018,” the notice read.
The lawyers have also filed for a stay on the California court’s custody order pending the disposal of the appeal.
The US Department of Justice (DOJ) had filed a civil forfeiture suit against the Equanimity on June 15 last year, claiming that the US$250 million vessel was purchased using the proceeds of misappropriation of 1MDB that had been channelled through the US financial system.
It claimed that the vessel owned for the benefit of the Penang-born tycoon Low Taek Jho through a series of intermediaries including Equanimity Ltd.
The lawsuit is one of at least 30 1MDB-related civil forfeiture suits lodged by the DOJ over the past two years to recover money “stolen” from Malaysia’s troubled sovereign wealth fund 1MDB.
1MDB had previously insisted that all its money is accounted for, whereas Low reportedly claimed the allegations against him were politically motivated.
On March 27, almost a month after the vessel was seized by Indonesian authorities acting on the FBI’s request, the DOJ filed an application to take custody of the vessel in order to bring it back to the US.
It claimed that the vessel’s crew are beholden to Low and had previously attempted to evade seizure, and hence could not be trusted to bring the vessel to the US even under a court order.
Both the DOJ and the Equanimity’s claimants had also agreed to sell the vessel while the case is still pending but argued over where and how the sale should be conducted.
The California district judge Dale S Fischer ruled in the DOJ’s favour on May 15, ordering custody of the ship be turned over to the US government, and for the vessel to be brought to the US.
However, she also instructed for the custody order to be stayed for 30 days to allow the claimants time to file an appeal before the order could take effect.
This was after an Indonesian court ruled that the seizure of the vessel on Feb 28 was invalid due to procedural impropriety and ordered the Indonesian police to return the vessel to its claimants.
However, the superyacht has not since left Indonesian waters and still moored off Bali.
Four reasons
In its filing seeking a stay on the custody order, lawyers acting for the claimants noted that the 30-day stay granted by Fischer is set to expire on June 15.
“Claimants currently face irreparable harm including deprivation of their unique property, as well as the immediate danger posed to the current value and future sale price of that property.
“Additionally, if the request for a stay were heard according to a regular motion timetable, the original 30-day stay granted by this court would expire before the motion could be decided and before claimants’ appeal can be heard, automatically making the government the custodian and requiring claimants to tender the vessel to the government before claimants’ appeal could be heard, which could moot claimants’ appeal,” it said.
The DOJ has yesterday filed a motion opposing the stay, as this would not be, among others, in the public interest.
“As the court has already held, keeping the Equanimity outside the United States would ‘risk […] some turn of events that undermines the asset seizure that was previously ordered by this court…’
“The court decided that it was worth bearing this risk for 30 days in order to give claimants a chance to seek appellate review. But extending the stay would increase this risk and imperil the public interest in forfeiting tainted assets.”
In its appeal, Jho Low’s lawyers cited four reasons why the custody order should be overturned.
Among others, it reiterated its argument that the custody order would violate Indonesian sovereignty.
It also argued that US laws governing the seizure of assets in civil forfeiture suits - specifically 18 USC Section 983(j) - does not allow for repatriation as a form of relief that the court could order because it is not mentioned in the statute.
This is in contrast to criminal forfeiture suits where the court’s power to order assets to be repatriated from abroad is expressly allowed by law, they said. -Mkini
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