PETALING JAYA: The Malaysian Government will apply to the High Court in London for an order to set aside a US$5.78bil (RM24.16bil) consent award recorded in May last year by an arbitration tribunal sitting in London.
Attorney General Tommy Thomas said that they are confident they have a strong case in the arbitration between the International Petroleum Investment Company (IPIC) and Aabar Investments PJS, as claimants, and 1Malaysia Development Berhad (1MDB) and Minister of Finance Inc., as respondents.
Under the consent award, Malaysia is obliged to pay US$5.78bil (RM24.16bil) to IPIC and the bond trustee over a five-year period.
So far, US$1.46bil (RM6.1bil) has been paid, leaving a balance of US$4.32bil (RM18.06bil), with the next interest payment of US$50mil (RM209mil) due on Nov 11.
Similar interest payments are payable periodically until April 2022 with the final bullet payments, representing principal and interest of US$1.8bil (RM7.52bil) each, due and payable in May and October of 2022.
Tommy said the basis of Malaysia’s legal challenge was that the consent award was procured by fraud or in a manner contrary to public policy.
He said the Court application relates to the knowledge of IPIC and Aabar of the serious allegations made by the US Department of Justice (DOJ) against former Prime Minister and Finance Minister
Datuk Seri Najib Razak, who was the “ultimate decision maker” in 1MDB.
Tommy added that such knowledge on their part was acquired no later than the time when US Attorney General Loretta Lynch announced during a press conference in July 2016 the filing of several civil suits by the DOJ for the freezing of assets purchased by fraudsters from stolen proceeds.
He said the grave detailed allegations in those DOJ court documents were given tremendous global publicity, particularly in the political and business media, entering the global public domain by July 2016.
Tommy said that Najib is identified as “MO1” in the DOJ pleadings and any reasonable reader reading these documents would immediately become aware of his central role in defrauding 1MDB to the benefit of himself, his stepson and Jho Low.
“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,” said Tommy in a statement on Tuesday (Oct 30).
Tommy said that as a result of the fraud, Malaysia will claim that they are relieved from any obligation to pay the balance of the US$4.32bil to IPIC or Aabar under the consent award, and additionally have a right to recover the US$1.46bil already paid.