PUTRAJAYA (Nov 6): Former treasury secretary general Tan Sri Dr Mohd Irwan Serigar Abdullah was successful in his bid on Wednesday to bring in two former 1Malaysia Development Bhd (1MDB) board members and its former chief financial officer, Azmi Tahir, as third parties in a US$6.59 billion suit filed by 1MDB against Irwan and Arul Kanda Kandasamy, a former president of the company.
A three-member Court of Appeal (COA) bench led by judge Datuk ES Nantha Balan allowed Irwan’s appeal to bring in former 1MDB board members, Datuk Seri Norazman Ayob and Datuk Kamal Mohd Ali, along with Azmi, as third parties, who may be liable to pay 1MDB if a case had been found against Irwan and Arul Kanda in the suit.
Norazman and Kamal were fellow 1MDB board members from 2016 and 2018, along with Irwan.
The bench, which includes judges Datuk Azmi Arifin and Datuk Ahmad Kamal Md Shahid, unanimously allowed Irwan’s appeal, and ordered the trio to collectively pay costs of RM40,000.
On Sept 6, it was reported that High Court Judicial Commissioner Datuk Raja Ahmad Mohzanuddin Shah Raja Mohzan had dismissed Irwan’s application to bring the three in as third parties along with three others, namely former 1MDB board chairman Tan Sri Che Lodin Wok Kamaruddin, board member Datuk Seri Asri Hamidon, and current chairman Datuk Johan Mahmood Merican.
The High Court found that there was an inordinate delay by Irwan to file the application.
Since then, Irwan has dropped Che Lodin, Asri, and Johan in his appeal.
The latest decision was confirmed by Irwan’s counsel Lavinia Kumaraendran, who appeared with Mavin Thillainathan, when contacted by The Edge.
Meanwhile, Razlan Hadri Zulkifli appeared for Norazman and Kamal, while Wan Aizuddin Wan Mohammed appeared for Azmi.
‘No delay’ in Irwan filing third-party proceedings
Nantha Balan in his broad grounds to the decision said the bench thought there was no inordinate delay in Irwan taking out the third party proceedings.
The judge said Irwan had been waiting for documents from 1MDB’s solicitors, who had initially given the impression that they would supply everything that was asked by Irwan.
“However, 1MDB’s solicitors later resiled (retracted the agreement) and said they would not be giving the requested documents. Of course, had they stated their position from the earliest onset, Irwan would have applied for discovery.
“Hence, the delay here was to a large part contributed to by 1MDB who declined to give the documents, but only did so after the third party action was filed. Of course, in between, 1MDB had provided some, but not all the documents. In light of these developments, it cannot be said that Irwan, who left 1MDB without any documents, was guilty of delay.
“In our view, the issue of delay must be examined in the context that third party action for indemnity or contribution is an independent and separate action from the main action, and the cause of action or time begins to run only when the defendant is found liable for the plaintiff’s action against the defendant.
“Viewed in that way, we do not think that there was any inordinate delay. Of course, we accept that Irwan’s third party action will cause delay to the trial which is still ongoing, but that is unavoidable, particularly in a case of this magnitude involving several complex transactions, voluminous documents, board of directors’ papers, minutes, etc, which must all be thoroughly examined and the facts properly marshalled before filing third party action,” the judge said.
Looking at the statement of claim against the third parties, the judge said it could not be said that the claim for contribution was frivolous or an abuse of process.
“There are many allegations made against Azmi, and against Norazman and Kamal. These parties have filed their defence to the third party action and have to answer for their respective roles as CFO, and as directors, respectively. We do not think that it is entirely correct to say that it is for 1MDB to choose who they wish to sue. That is only partly right.
“The correct position is that it is open to a defendant to bring as third parties, all parties who share responsibility and who may be liable for the claim in the main suit. In the present case, the third parties may have to contribute to the claim made by 1MDB against Irwan. So, as far as the claim against Norazman and Kamal is concerned, whilst they owe duties to 1MDB, this does not mean that Irwan cannot seek contribution against them via third parties.”
Prior to this, a separate COA bench in June this year had allowed Arul Kanda’s appeal to include his counterclaim for outstanding salary and bonuses from 1MDB, and also for him to amend his defence statement.
1MDB had filed its suit against Irwan and Arul Kanda in May 2021, where it claimed that both Arul Kanda and Irwan were liable for breach of duties and breach of trust, resulting in the company suffering losses amounting to US$1.83 billion in relation to its investment in 1MDB-PetroSaudi Ltd, which was converted into stakes in Brazen Sky Ltd and then converted into an investment in Bridge Global Fund.
It also alleged that Arul Kanda and Irwan had committed breach of trust and conspiracy by misappropriating US$3.5 billion of 1MDB money and paying it to Aabar Investments PJS Ltd — a shell company pretending to be a subsidiary of the International Petroleum Investment Company (IPIC) — and subsequently paying another US$1.265 billion to IPIC in May 2017.
1MDB also claimed that Irwan had conspired with Arul Kanda to cause the fund to implement an employment extension agreement that resulted in it paying RM2.91 million to Arul Kanda.
The 1MDB trial for Irwan and Arul Kanda has begun, and is presently proceeding before Raja Ahmad Mohzanuddin.