PUTRAJAYA (Oct 12): 1Malaysia Development Bhd (1MDB) is in talks with Deutsche Bank (M) Bhd to settle their legal dispute, the court heard on Monday.

Datuk Lim Chee Wee, counsel for 1MDB, informed Chief Judge of Malaya Datuk Seri Hashim Hamzah about the talks during its application to the Federal Court for leave to appeal a decision favouring UK law firm White & Case LLP.

Lim said he has informed High Court Judicial Commissioner Rihada Rafie over the proposed settlement, who is hearing the case on Oct 26.

“We (1MDB) have alerted the High Court trial judge over this,” the counsel added.

When approached later after the Federal Court proceedings, Lim declined to reveal details on the talks.

1MDB had sued Deutsche Bank for US$1.11 billion, where it also originally claimed US$800 million from JPMorgan and US$1.03 billion from Coutts and Co, along with PetroSaudi International Ltd, PetroSaudi Holdings (Cayman) Ltd, businessman Tarek Obaid and his right hand man Patrick Mahony.

Mahony's name has also been dropped from this suit, but has been named separately in another suit.

1MDB originally named those entities in filing the US$4.77 billion lawsuit against the three banks, two companies and two individuals for negligence, breach of contract, breach of fiduciary duties, conspiracy and dishonest assistance in May 2021.

On Nov 13, last year, 1MDB had however dropped JPMorgan and Coutts and Co from the suit, leaving only Deutsche Bank.

Deutsche Bank was represented by Messrs Rahmat Lim & Partners in the ongoing High Court proceedings.

Besides JPMorgan and Coutts and Co, prior to this, 1MDB had settled its suits with Goldman Sachs (for US$3.9 billion) and AmBank Group (for RM2.83 billion) in what is described worldwide as the largest kleptocratic case, where former prime minister Datuk Seri Najib Razak has been found guilty by the High Court last December.

Najib is appealing the conviction and sentence of 15 months’ imprisonment and a massive fine before the Court of Appeal, which is still pending.

Lim had informed the three-member bench that also comprised Chief Judge of Sabah and Sarawak Datuk Azizah Nawawi, Federal Court judge Datuk P Ravinthran and also Hamzah on the possibility of seeking further instructions on whether to go ahead with the Oct 26 proceedings before the High Court.

1MDB is appealing to the Federal Court on Monday to reinsert the UK law firm as part of the legal action against those named.

The law firm is said to be pivotal in the drafting of agreements between 1MDB and PetroSaudi International.

At Monday’s proceedings, Coutts & Co counsel Datuk Cyrus Das objected to 1MDB’s motion to insert more than 3,000 pages of documents with regards to the Malaysian firm’s ongoing appeal that comprised proceedings in Singapore and Malaysia.

Cyrus told the bench that these were never brought up at the Court of Appeal and should not be raised here.

Hence, the senior lawyer objected to those documents being produced in 1MDB’s leave to appeal to reinsert the UK law firm.

1MDB co-counsel Khoo Guan Huat, who appeared with Lim and Elizabeth Lai, informed the court that this issue had been raised during case management before the apex court last week.

He said the court should take notice of the ongoing proceedings in Malaysia and take judicial notice over it in order to scrutinise the broad grounds given by the Court of Appeal, which removed the UK firm in its proceedings.

Khoo said with regards to the Singapore cases, what was included are the broad grounds and not the minutes of the proceedings.

Despite the objection raised by Cyrus, the bench allowed 1MDB’s motion for the additional documents and directed that affidavits be filed to admit them.

Hamzah directed that case management be held on Monday to fix an early hearing date for the matter.

This resulted in Lim having to disclose what was transpiring at the High Court, of the possibility of the Oct 26 proceedings commencing.

On Aug 12, this year, the Court of Appeal ruled that the High Court lacks the jurisdiction to hear 1MDB’s lawsuit against White & Case.

“London is a literal proper forum, given the express English choice of law and foreign process,” said COA judge K Muniandy, who sat with Datuk Alwi Abdul Wahab — who led the bench — with Datuk Aliza Sulaiman as the second judge.

He also set aside the court papers served against the law firm in 2024, noting that the requirements for service of proceedings outside Malaysia had not been satisfied.

The suit was also time-barred. The appellate bench ruled that it had been filed out of time under the Limitation Act 1953, as the alleged losses and fraud involving the state investment fund also known as 1MDB had already been made public in 2015 and 2016, he said.

Under the act, a plaintiff is required to commence proceedings within six years from when the cause of action accrued.

The High Court had initially allowed 1MDB’s suit against White & Case with a separate suit filed by 1MDB against several other defendants, including Deutsche Bank and PetroSaudi International.

Prior to this, Mahony was named in a separate suit with White & Case before consolidation.

Read also:
1MDB drops JPMorgan, Coutts & Co from US$4.77 bil lawsuit, case now targets Deutsche Bank, PetroSaudi, Tarek Obaid and Patrick Mahony
UK law firm gets to set aside 1MDB lawsuit in Malaysia; appellate court says London is the proper forum
1MDB seeking to appeal ruling that High Court has no jurisdiction to hear suit against UK law firm
Malaysia recovers over RM20.7b from financial institutions over 1MDB scandal — MOF