KUALA LUMPUR (Sept 26): The court hearing the civil case by SRC International Sdn Bhd against Datuk Seri Najib Razak can decide differently from the SRC criminal case, the court heard on Friday.
Najib's lawyer, Tan Sri Muhammad Shafee Abdullah, argued that the Malaysian legal system allows for differing judgements between the civil and criminal courts.
"If that [is not the case], then no one can take civil action which arises from criminal matters like [road] accidents and so on," he argued.
The senior counsel highlighted the example of the infamous criminal and civil proceedings of former American football star OJ Simpson in the 90s.
The criminal and the civil proceedings had two different outcomes. In the criminal trial, a jury acquitted Simpson of the murder of his ex-wife Nicole Brown Simpson and her friend Ronald Goldman.
However, in the civil action brought by the families of the deceased, the jury found Simpson responsible for the deaths and awarded their families US$33.5 million in damages.
Shafee went on to argue that the overlap between the civil and criminal cases is only an abuse of process if there is abuse established.
Najib's defence or pleadings are not an abuse of process because he has to defend himself to the best of his ability, the senior lawyer argued.
"The suit landed on him. He never asked for it. He has to defend himself to the best of his ability. So, how can that be an abuse of process?" Shafee said.
Najib, 72, is currently serving his prison sentence after the apex court upheld his guilty conviction for criminal breach of trust, money laundering, and abuse of power of SRC funds amounting to RM42 million, which was received between Dec 26, 2014 and Feb 10, 2015.
Besides the criminal case, SRC had initiated civil cases against Najib. In this particular suit, the company is suing Najib on claims that, among others, US$120 million of company funds went into the former prime minister's personal account.
'A loyal servant doing his incompetent best does not equal to breach of fiduciary duty'
Initially, the suit also named former company board members Tan Sri Ismee Ismail, Datuk Suboh Md Yassin, Datuk Mohammed Azhar Osman Khairuddin, Datuk Shahrol Azral Ibrahim Halmi, and Datuk Che Abdullah @ Rashidi Che Omar as defendants.
They were dropped later, only for Najib to bring them back as third parties.
Elaborating on their submissions on Thursday, the third parties once again reiterated that Najib's claims lacked specific details pointing to breach of fiduciary duty.
Lawyer Datuk Loh Siew Cheang, who appeared for Mohammed Azhar, argued on Friday that Najib's pleadings conflate fiduciary duty and duty of care. The claims, he said, were disconnected.
Citing case law, Loh pointed out that mere incompetence does not equal to breach of fiduciary duty.
"A loyal servant who does his incompetence best is [not the same as] breach of fiduciary duty"," Loh said, adding that his client only came into the company in 2014 after the impugned funds had already left SRC.
Lawyer Abraham Au, representing Suboh, argued that these third parties were non-executive directors and were not obligated to be hands-on with regard to company affairs.
He also argued that the board was not obligated to go above and verify or investigate what was communicated to them by the company management.
"The business of corporations can't go on if directors can't trust the management to carry out its duty. If the board does not know of the fraud, can the board be blamed?" Au said.
In this suit, SRC is seeking a declaration from the court that Najib is liable to account for the company's losses of US$1.18 billion due to breach of duties and trust.
It is also asking for an order for Najib to compensate US$120 million and former SRC chief executive officer Nik Faisal Ariff Kamil to pay US$2 million to SRC, as well as damages.
Submissions are now complete. Trial judge Datuk Ahmad Fairuz Zainol Abidin will now set a date for the court to deliver its decision on the matter.
Erratum: An earlier version of this story had attributed the arguments that rightly belong to lawyer Abraham Au (representing Datuk Suboh Md Yassin) to lawyer Chong Yik Loong (representing Datuk Shahrol Azral Ibrahim Halmi). The error is regretted.