PUTRAJAYA: The Court of Appeal has dismissed an application by UK law firm White & Case LLP to stay a High Court ruling allowing a lawsuit filed by 1Malaysia Development Bhd (1MDB) to proceed in Malaysia.
The firm had sought to halt the High Court proceedings pending the disposal of two appeals scheduled to be heard by the Court of Appeal on May 20.
However, a three-member bench, comprising Court of Appeal judges Justices Datuk P Ravinthran and Datuk Faizah Jamaludin, and High Court judge Justice Datuk Ahmad Shahrir Mohd Salleh, rejected the stay application.
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In delivering the court’s unanimous decision on Monday (Feb 23), Justice Ravinthran said the bench was not persuaded that the stay application should be granted.
Addressing the law firm’s argument that it would face significant expense and inconvenience owing to the length of the statement of claim, Justice Ravinthran noted that such burdens are an inherent part of litigation.
Any prejudice arising from the expenditure of time or resources, he said, could be addressed through an award of costs if the firm succeeds on appeal.
Justice Ravinthran noted that the appellate court further observed that the High Court had refused to stay the proceedings and had ordered the law firm to file its statement of defence, with the deadline set to expire on Tuesday (Feb 24).
"A stay of proceedings matter is akin to a case management decision.
"In our view, such a decision should not be lightly interfered with as the High Court should have a free hand in managing the case of the trial unless there is a good reason for further intervention," he said.
He then ordered the law firm to pay RM30,000 in legal costs.
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The 1MDB suit was filed in the Kuala Lumpur High Court in 2024, seeking US$1.83bil and US$33mil in losses from White & Case and Patrick Mahony, a director of PetroSaudi International Ltd.
The fund alleges that White & Case assisted PetroSaudi in committing fraud and conspired to harm 1MDB while acting as its legal counsel.
The alleged misconduct relates to two corporate transactions: the 2009 joint venture with PetroSaudi International, known as the Good Star phase, and the 2010 restructuring of 1MDB’s stake in the joint venture, which 1MDB claims resulted in significant financial losses.
The writ of summons was served out of jurisdiction on White & Case at its UK offices, and the firm subsequently applied to set aside the service, seeking a declaration that the Malaysian court had no jurisdiction to hear the suit.
Last year, the High Court rejected White & Case’s challenge, ruling that it could hear the lawsuit because the trial witnesses are located in Malaysia. The law firm then appealed this decision to the Court of Appeal.
White & Case is also appealing another High Court decision that ordered this lawsuit to be consolidated with a separate one filed by 1MDB against several other defendants, including Deutsche Bank and PetroSaudi International. – Bernama
