KUALA LUMPUR: The High Court today dismissed applications by Prime Minister Najib Razak, the government and 1MDB to strike out a suit brought against them for paying US$1.2 billion (RM4.75 billion) to Abu Dhabi-based International Petroleum Investment Company (IPIC).
Lawyer Mohamed Haniff Khatri Abdullah said Justice Hue Siew Kheng ruled the 10 plaintiffs had the legal standing to bring the suit as the payment involved public funds.
“The judge also held that the litigants have an arguable case and the matter must go for trial,” he told reporters after Hue delivered her decision in chambers.
Haniff said the three defendants also failed to provide sufficient materials for the court’s consideration to annul the suit since Second Finance Minister Johari Abdul Ghani had in August 2016 said he was very confident state investor 1MDB would win the arbitration case with IPIC.
Haniff said the judge also dismissed Najib and 1MDB’s oral application for stay from filing their defence pending an appeal in the Court of Appeal.
They have been ordered to file their defence by Jan 30 while the next case management is on Feb 5.
Lawyer Mohamed Hafarizam Harun, who appeared for Najib, said he would make a formal stay application and also file an appeal in the Court of Appeal.
Lawyer Tan Hock Chuan, who represented 1MDB, said he would seek instructions from his client before proceeding.
Federal counsel Alice Loke Ying Ching represented the government.
Last year, the High Court here struck out three 1MDB related suits brought by former minister Zaid Ibrahim, Petaling Jaya Utara MP Tony Pua, and former prime minister Dr Mahathir Mohamad together with ex-Umno members Kharuddin Abu Hassan and Anina Saadudin.
Last July, a group, calling itself Gerakan Anakmuda Tolak Najib (Ganti) comprising opposition youth members, sought a court order that the settlement agreement on May 11 between IPIC and 1MDB at the London International Court of Arbitration be declared invalid.
Ganti also sought to compel Najib, the government and 1MDB to provide detailed accounts of all money paid to IPIC and its subsidiary, Aabar Investment PJS.
It claimed the consent award agreed on between IPIC and Aabar Investment PJS in London was wrong and fraudulent.
The group said it was forced to sue Najib and two others as no action had been taken on those who made the “fraud payments” to the British Virgin Island-registered Aabar Investment PJS Limited or Aabar BVI, which IPIC claimed was not its subsidiary.
IPIC’s subsidiary is Aabar Investment PJS, without the Ltd.
On April 24, 1MDB said in a statement that IPIC had agreed on a settlement following arbitration at the London Court of International Arbitration.
“As per the settlement, 1MDB will, among others, make certain payments to IPIC and will assume responsibility for all future interest and principal payments for two bonds issued by the 1MDB group of companies due in 2022,” the company said.
1MDB previously claimed it had paid IPIC’s subsidiary, Aabar BVI, a total of RM3.51 billion between 2012 and 2014.
However, IPIC disputed this in 2016, claiming it never received the money.
According to filings with the London Stock Exchange, IPIC said it would receive US$1.2 billion in two equal payments on July 31 and Dec 31.
The state investor had settled the amount.
On Nov 16, during submission, Haniff said the court should hear the merit of the suit as there was an element of fraud when the US$1.2 billion was paid to IPIC.
He said Johari had announced the government would fight tooth and nail in an arbitration hearing over the payment.
“However, in April (2017), it was revealed that the finance ministry decided not to contest, and entered a consent award to pay US$3.5 billion to the original Aabar,” he told Hue.
Hafarizam said Ganti had no legal standing and its members did not suffer any damage.
“They are not parties in the arbitration and they are not adversely affected,” he said.
He also said the High Court had no jurisdiction to hear the suit as the arbitration proceedings had taken place in London.
Hafarizam said the plaintiffs were wrong to include Najib as a party to the suit as he was not involved in the deal concerning IPIC and Aabar Investments PJS. -FMT
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