PUTRAJAYA (Oct 5): The Federal Court on Thursday upheld the RM42 million Mareva injunction (asset-freezing order) imposed by the High Court on March 22, 2022 in the suit filed by SRC International Sdn Bhd and its subsidiary, Gandingan Mentari Sdn Bhd against former premier Datuk Seri Najib Razak.
A three-member apex court bench led by Federal Court judge Tan Sri Nallini Pathmanathan unanimously dismissed Najib’s motion for leave for the matter to be heard on its merits and a chance to revisit several old case laws in relation to the granting the Mareva injunction.
Najib's counsel Tan Sri Muhammad Shafee Abdullah cited the Lakatamia Shipping Company Ltd vs Toshiko Morimoto 2019 case at the English Court of Appeal, but Nallini said it does not alter the test in the granting of the injunction.
The three criteria in granting a Mareva injunction, as decided previously, were the plaintiff having a strong arguable case, the assets being within jurisdiction, and that there was a real risk of dissipation of assets.
“This court is not satisfied that we should restate the principles on the basis of [the] Lakatamia [case]. The application of the test propounded in S&F International Ltd vs Trans-Con Engineering Sdn Bhd, will vary from case to case.
“It appears to us that the (High Court) judge (in granting the Mareva injunction) appreciated this difference and applied it accordingly by the lack of probity dealing from complex factual matrix as being sufficient to go into the heart of the question of dissipation of assets. Accordingly, the revisiting of the test is not warranted. For these reasons, this court dismissed the motion,” Nallini said.
Nallini, who sat with Federal Court judges Datuk Nordin Hassan and Datuk Abu Bakar Jais, ordered Najib to pay RM30,000 costs to both SRC International and Gandingan Mentari.
Najib's failure to get leave to appeal means that the Mareva injunction to freeze his assets is in line with the suit filed by the two companies.
Last week, the High Court also dismissed Najib’s application to set aside a US$681 million (RM3.2 billion) Mareva injunction in a suit involving 1Malaysia Development Bhd and another 1MDB subsidiary.
Although the US$681 million Mareva injunction was first granted to 1MDB in February, the RM42 million Mareva injunction granted to SRC International and Gandingan Mentari was the first to go on appeal at the Court of Appeal, then the Federal Court.
In civil cases, permission for the appeal to be heard on its merits must be obtained, based on questions of law which are considered to be new, novel, and of public interest, according to Section 96 of the Courts of Judicature Act.
High Court judge erred in granting injunction based on alleged past conduct
During the hearing on Wednesday, Shafee had posed six questions of law to be considered by the Federal Court, and they all hinge on revisiting the S&F International Ltd case decided in 1985, as opposed to the Lakatamia case which was decided in 2019.
The senior counsel argued that the High Court judge had erred in granting the injunction nine months after the suit was filed, as no evidence of dissipation of assets had been produced by the two companies.
He said although the dissipation of assets was one of the grounds in granting the injunction, the companies must show proof that the former prime minister had done this.
“There is not an iota of evidence to show evidence of dissipation of assets. Furthermore, besides this suit, he is also faced with a civil claim for income tax prior to this and in granting this relief, there must be evidence of asset dissipation.
“Here in the suit by SRC, the allegation is on breach of fiduciary duty, dishonesty and criminal breach of trust and this purported (past) conduct was used as a basis by the companies to ask for the Mareva injunction,” Shafee said.
Najib’s lawyer argued that in the Lakatamia case, the English Court of Appeal found there was an attempt to dissipate the asset in question, resulting in the court granting the injunction.
This recent Lakatamia case, Shafee argued, warranted a revisit of the S&F International case.
Lack of honesty on Najib’s part, claimed by SRC
SRC and Gandingan Mentari counsels Datuk Lim Chee Wee and P Gananathan said the lack of probity on Najib’s part was the main reason why the High Court judge was right to grant the Mareva injunction.
“The lack of probity leads to the inference on the presumption (on the possibility) of the dissipation of assets. Those allegations of lack of probity or dishonesty were unrebutted.
They argued that it is not necessary to adduce further evidence of possible dissipation of assets as an inference could be drawn that the two companies have a good arguable case.
During the period between the filing of the suit and the application for the injunction by the two companies, Najib had not filed his defence to the suit, which Shafee claimed was due to his ongoing SRC International criminal case.
Najib is currently serving a 12-year jail sentence at the Kajang Prison and has been fined RM210 million, after the apex court found him guilty of all seven charges of abuse of power, criminal breach of trust and money laundering involving RM42 million of SRC International funds.
Earlier, Najib's side, through Wan Mohammad Arfan Wan Othman, tried to apply for an adjournment to the case as original counsels Harvinderjit Singh and Muhammad Farhan Shafee were unwell.
However, Nallini said the bench had read all the written submissions and noted that the firm Shafee & Co has a large pool of lawyers, giving Wan Mohammad Arfan time to find someone senior from the firm to file the submissions or do so himself.
It was then at 10.45am, that Shafee was roped in and informed the court that he had to adjourn a 2019 drug case to submit on this matter and Nallini replied “Glad to see you”.
Prior to this appeal, the Court of Appeal had on Dec 6 also dismissed Najib’s bid to set aside this Mareva injunction.