PUTRAJAYA (Feb 23): The Court of Appeal (COA) has on Monday dismissed two motions for a stay, filed by UK law firm White & Case, of the High Court’s decision last year that had declared that Malaysia has jurisdiction to hear a suit filed against White & Case by 1Malaysia Development Bhd (1MDB), and for the suit to be consolidated with another suit that 1MDB had filed against Deutsche Bank (M) Bhd and PetroSaudi International Ltd.
A three-member bench led by COA judge Datuk P Ravinthran said that while White & Case’s counsel, Ranjit Singh, had strongly argued that his client needs a stay of the High Court’s scheduled hearing of the suit in October this year, and a stay over the need to file its defence to the suit on Tuesday (Feb 24), the court disagreed with granting it.
“A stay of proceedings is akin to case management. In our view, it should not be interfered with, as the High Court should be given a free hand in managing a full trial.
“While the appellant (White & Case) has provided a strong argument that they need time to prepare and [budget for the extra] expense as a result of the consolidation of this suit and another suit due to the lengthy statement of claim of both suits.
“However, this is part and parcel of litigation, and it can be compensated by the award of costs should they (White & Case) be successful. We cannot see any nugatoriness in granting (the stay) and are not persuaded for a stay to be granted. Hence, we dismiss the motions,” the judge said.
Ravinthran sat with COA judge Datuk Faizah Jamaludin and High Court judge Datuk Ahmad Shahrir Mohd Salleh in the unanimous decision.
White & Case wanted a stay for the following: It has to file its defence to the suit on Tuesday (Feb 24), its appeal over jurisdiction and consolidation is scheduled to be heard on May 20 at the COA, while the hearing of the suit is scheduled for October.
1MDB filed the suit in 2024, where it is claiming US$1.83 billion and US$33 million in losses from White & Case and PetroSaudi International director Patrick Mahony.
1MDB claims that White & Case helped PetroSaudi International commit fraud and conspired to harm 1MDB while acting as its lawyers.
The alleged fraud involved two corporate deals during 1MDB’s 2009 joint venture with PetroSaudi International — the Good Star phase — and the restructuring of 1MDB’s stake in the 2010 joint venture, which 1MDB says caused it financial losses.
The writ for the suit was served out of jurisdiction to White & Case in the UK, and the firm challenged whether 1MDB has the jurisdiction to hear the suit in Malaysia and not in England.
Why Malaysia has jurisdiction
Last month, High Court judge Leong Wai Hong in his written grounds to a decision made last year, ruled that 1MDB had jurisdiction to have the suit heard here and allowed the consolidation of the suit which 1MDB filed against Deutsche Bank and PetroSaudi International and its subsidiary, along with PetroSaudi director Tarek Obaid.
Leong said that much had changed due to globalisation, where funds can now move easily across jurisdictions.
“The world has changed much due to globalisation. Fraudsters nowadays operate from multiple jurisdictions. Funds can now move easily across jurisdictions with a single click or tap via digital platforms. The courts, too, must move with the times. This is particularly so if the elements of the cause of action took place in multiple jurisdictions, as is alleged here by 1MDB,” the judge said.
Leong also recognised that 1MDB is based here, where the losses were suffered, and that most of those involved are also from Malaysia.
“The key players in the fraud committed against 1MDB are alleged to be (Datuk Seri) Najib Razak, Casey Tang, and other rogue officers of 1MDB who are all Malaysians. White & Case is alleged to have dishonestly assisted Najib and Tang in each of their breaches of fiduciary duty and/or breaches of trust owed to 1MDB in Malaysia by providing the legal documentation to be used in Malaysia; and the fraud’s centre of gravity is Malaysia,” he reasoned.
On consolidation, the High Court judge had said that since PetroSaudi International, Tarek, and Deutsche Bank had entered an appearance in that earlier suit, 1MDB’s application to consolidate is allowed under Rules of Court 2012.
White & Case argues it has to go through many suits
Ranjit had earlier argued to the bench that the UK firm needed a stay for the appeal on jurisdiction and consolidation following the extensive nature of this suit, as the suit against White & Case was also referred to in the suit by 1MDB against PetroSaudi International, Tarek, and Deutsche Bank, and also in 1MDB’s main suit against Najib and other 1MDB officers.
“Hence, we have to look at three different suits to prepare the case. Furthermore, this suit was filed in 2024, as compared to the other two suits in 2021.
“The statement of claims to the two earlier suits are voluminous, involving hundreds of pages. It involves time and expenses,” he said.
1MDB’s lead counsel Datuk Lim Chee Wee countered by saying that White & Case had previously been granted an extension twice for it to submit its defence to the suit and hence, it should not be granted a stay.
Lim also believed that White & Case had already prepared its statement of defence to be submitted on Tuesday, and hence the matter should not be stayed.
After a short recess for deliberation, Ravinthran read the bench’s decision in dismissing the motion and ordered White & Case to pay costs of RM30,000 for the two motions.