Malaysia to file legal challenge in London High Court to set aside Consent Award to pay US$5.78 bln to IPIC

KUAL A LUMPUR: The Government of Malaysia will be filing an application at the High Court in London to set aside a Consent Award by an Arbitration Tribunal which obliged the government to pay US$ 5.78 billion to International Petroleum Investment Company ( IPIC).

Attorney- General Tommy Thomas in a statement yesterday said the legal challenge will be filed on the basis that the Consent Award was procured by fraud or in a manner contrary to public policy.

“We are confident that we have a strong case,” he said.

He explained that the application related to the knowledge of IPIC and Aabar Investments PJS of the serious allegations made by the United States Department of Justice ( DOJ) against former Prime Minister and Finance Minister Datuk Seri Najib Tun Razak, who was also the moving spirit and ultimate decision maker in 1Malaysia Development Berhad (1MDB).

“Such knowledge on their part was acquired, “inter alia”, no later than the time when the DOJ’s Press Conference was held by the Attorney- General of the United States, Loretta Lynch, in July 2016 when she announced the filing by DOJ of several civil suits for the freezing of assets purchased by fraudsters from stolen proceeds, and popularly described as the greatest kleptocracy in modern history.

“The grave, detailed allegations in those DOJ court documents were given tremendous global publicity, particularly in the political and business media.

“They had certainly entered the global public domain by July 2016,” he said.

Thomas said Najib was identified as “MO1” in the DOJ pleadings and any reasonable reader reading these court documents would immediately become aware of his central role in defrauding 1MDB to the benefit of himself, his stepson and Malaysian businessman Jho Low who is wanted by Malaysia in connection with the 1MDB scandal.

“In such circumstances, Malaysia takes the position that IPIC and Aabar were aware of the fraud of Najib Razak. He was principally responsible for 1MDB and Minister of Finance Inc. consenting to the Award.

“Every system of law would hold that he could not possibly have acted in the best interests of his country and his company. Indeed, he did not.

“Fraud is an established ground to challenge the consent award for public policy reasons.

“We are pleased to report that the application will be filed today in the High Court in London.

“Malaysia will claim that as a result of the fraud, we are relieved from any obligation to pay the balance of the US$ 4.32 billion to IPIC or Aabar under the Consent Award, and additionally have a right to recover the US$ 1.46 billion already paid,” he said.

Thomas said the Arbitration, conducted under the Rules of the London Court of International Arbitration, was between IPIC and Aabar Investments PJS, as claimants, and 1Malaysia Development Berhad and Minister of Finance Inc as respondents.

He said under the Consent Award, Malaysia was obliged to pay US$ 5.78 billion to IPIC and the Bond Trustee over a five year period.

“So far, US$ 1.46 billion has been paid, leaving a balance of US$ 4.32 billion, with the next interest payment of US$ 50 million due on November 11, 2018. Similar interest payments are payable periodically until April 2022.

“The final bullet payments, representing principal and interest of US$ 1.8 billion each, are due and payable in May and October 2022,” he said. — Bernama