Judge says it will be a waste of judicial time if their appeal to strike out the suit is eventually allowed.
PUTRAJAYA: Prime Minister Najib Razak and state investor 1MDB have been spared from filing their defence by Friday in a lawsuit brought against them for paying US$1.2 billion (RM4.72 billion) to Abu Dhabi-based International Petroleum Investment Company (IPIC).
This was decided today by a three-man Court of Appeal bench which allowed their stay applications.
The High Court in Kuala Lumpur had refused them stay a week ago.
However, Justice Mohd Zawawi Salleh, who led the bench, said the applications by Najib and 1MDB should be allowed due to the special circumstances of the case.
“If the stay is not granted and in the event that their appeal (to strike out the suit) at the Court of Appeal is allowed, it will be a waste of judicial time,” he said.
Last week, High Court judge Hue Siew Kheng ordered Najib, 1MDB and the government to file their defence by Feb 9 as they would not suffer any prejudice.
Najib’s lawyer Mohamed Hafarizam today submitted that the plaintiffs did not have the locus standi to bring the action.
“Najib ought not to be brought in as a party as the out-of-court settlement in London involved IPIC and 1MDB,” he said.
He said it was also wrong for a Malaysian court to interfere with judicial affairs outside Malaysia.
Lawyer Tan Hock Chuan, for 1MDB, said a short stay should be allowed as the Court of Appeal had fixed case management on Feb 13 and the appeal against the High Court’s refusal to strike out the suit would be heard soon.
Lawyer Mohamed Haniff Khatri Abdulla, who represented his clients, named as Gerakan Anakmuda Tolak Najib (Ganti) and comprising opposition youth members, said there were no special circumstances to allow the stay.
He said Justice Hue had held that there was no statement under oath that the consent award between IPIC and 1MDB was protected under the Official Secrets Act (OSA) or any other law to restrict them from filing their defence.
Haniff, who was assisted by Muhammad Rafique Rashid Ali, said his clients had filed their suit in July, and that Najib and 1MDB were stalling the proceeding by refusing to file their defence.
He said although case management had been fixed on Feb 13, it was uncertain when the appeal would be heard.
“Our case is based on grounds that the out-of-court settlement was obtained by deceit and fraud. We have come here with clean hands and if we lose, we pay the costs,” he said.
Haniff added that a recent directive by Chief Justice Raus Sharif stated that cases should not be postponed unless there was “death or near death”.
On Jan 9, Justice Hue had dismissed applications by Najib, 1MDB and the government to strike out the suit, stating that the plaintiffs had an arguable case and the matter must go for trial.
The trio then appealed to the Court of Appeal.
On July 11, the plaintiffs sought a court order that the settlement agreement between IPIC and 1MDB at the London International Court of Arbitration on May 11 be declared invalid.
Ganti also sought to compel Najib, the government and 1MDB to provide detailed accounts of all the 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 the two others as no action had been taken against those who made the “fraudulent 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 Limited).
As per the settlement, 1MDB said it would, among others, make certain payments to IPIC and assume responsibility for all future interest and principal payments for two bonds issued by the 1MDB group of companies, due in 2022.
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 investment fund has already settled these amounts.