1MDB, IPIC set­tle­ment deal gets con­sent award

New Straits Times - - News -

KUALA LUMPUR: 1Malaysia De­vel­op­ment Bhd (1MDB) and Abu Dhabi’s In­ter­na­tional Petroleum In­vest­ment Com­pany (IPIC) have re­ceived a con­sent award from the Lon­don In­ter­na­tional Ar­bi­tra­tion Court over their set­tle­ment in­volv­ing US$3.5 bil­lion (RM15. 2 bil­lion) bonds.

The con­sent award, in the con­text of Malaysian law, is akin to the in­ter­na­tional ar­bi­tra­tion court ac­knowl­edg­ing that the dis­put­ing par­ties are opt­ing for an out-of-court set­tle­ment.

IPIC, in a fil­ing with the Lon­don Stock Ex­change yes­ter­day, re­vealed that the con­sent award was granted on Tues­day.

The con­sent was sig­nif­i­cant as it al­lowed the pro­posed set­tle­ment be­tween 1MDB and IPIC to move ahead as it was pre­vi­ously un­der the con­di­tion that a con­sent award must be granted.

“Fol­low­ing the an­nounce­ment on April 24, 2017, of the con­di­tional set­tle­ment reached be­tween In­ter­na­tional Petroleum In­vest­ment Com­pany PJSC, Aabar In­vest­ments PJS, the Min­is­ter of Fi­nance (In­cor­po­rated) Malaysia and 1Malaysia De­vel­op­ment Bhd, a con­sent award was made on May 9, 2017.

“Ac­cord­ingly, the set­tle­ment in re­spect of the ar­bi­tra­tion pro­ceed­ings at the Lon­don Court of In­ter­na­tional Ar­bi­tra­tion is now un­con­di­tional,” IPIC said in a brief state­ment.

IPIC had, on April 24, said 1MDB and MOF Inc had agreed to pay US$1.2 bil­lion, as well as as­sume re­spon­si­bil­ity for US$4.8 bil­lion in prin­ci­pal and in­ter­ests for two bonds that were pre­vi­ously guar­an­teed by IPIC.

Un­der the set­tle­ment, 1MDB and IPIC would en­ter into good faith dis­cus­sions about funds 1MDB had paid to cer­tain en­ti­ties.

The ar­bi­tra­tion came about due to a dis­pute be­tween 1MDB and IPIC on the two United States dol­lar bonds that were is­sued in 2012.

The bonds were raised by 1MDB when it ac­quired two power plants and were guar­an­teed by IPIC.

Sub­se­quently, 1MDB ran into fi­nan­cial con­straints and em­barked on a re­struc­tur­ing ex­er­cise.

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