KUALA LUMPUR (Oct 27): The High Court has dismissed an application by Mulia International Limited (MIL) — an international unit of Indonesia's prominent Mulia Group (PT Mulialand) — to stay a domestic commercial lawsuit brought against it by MKD Signature Sdn Bhd concerning the ownership of the Exchange 106 tower at Tun Razak Exchange (TRX).
In a judgment delivered on Oct 7, sighted by The Edge, High Court judge Leong Wai Hong ordered MIL to pay RM100,000 in costs to MKD Signature, ruling that there was no valid legal basis to halt the local Malaysian court proceedings, pending an international investor-state arbitration at the International Centre for Settlement of Investment Disputes (ICSID).
Relying on articles of ICSID’s convention, MIL argued that the High Court was bound to stay the suit in deference to ICSID’s exclusive jurisdiction and international law principles.
However, Leong said that MKD Signature – which is a special-purpose vehicle (SPV) owned by the Minister of Finance Incorporated (MoF Inc) under the Ministry of Finance – and MIL are distinct corporate entities governed by domestic (Malaysian) commercial contracts and are not parties to the ICSID proceeding.
He also said that national courts such as the High Court have the jurisdiction to adjudicate domestic contract disputes involving non-ICSID parties.
Leong explained that the Malaysian lawsuit does not hinder the ICSID proceedings.
The ICSID arbitration was registered on June 10, 2025, by Indonesian tycoon Eka Tjandranegara against the Government of Malaysia under the 2009 Asean Comprehensive Investment Agreement (ACIA).
The dispute stems from the development of the 106-storey skyscraper by Mulia Property Development Sdn Bhd (MPD). MIL originally held 100% of MPD, with Eka investing approximately RM1.22 billion into the project.
Following financing difficulties linked to negative market associations with the 1MDB scandal and procurement delays, MKD Signature acted as a borrower for an external financing facility of up to RM2 billion from HSBC.
In consideration for procuring the HSBC facility, MKD Signature acquired a 51% stake in MPD. MIL was granted a call option to repurchase the 51% stake and redeem the loan, with the deadline extended to June 26, 2023, via a supplementary agreement.
However, MIL failed to exercise the call option or redeem the loan facility by the deadline. On June 27, 2023, MKD Signature issued a Default of Call Option Notice and tendered a cheque for RM1.00 to compel MIL to transfer its remaining 49% shareholding in MPD to MKD Signature.
The lawsuit was filed in 2024 by MKD Signature to enforce its contractual rights. MIL subsequently applied for a stay on Oct 4, 2024, contending that MKD's action was an attempt by the Malaysian government to seize full ownership of Exchange 106 for a nominal total sum of RM2.00.
MKD Signature was represented by Rabindra S Nathan while MIL was represented by Christopher Leong and Rajendra Navaratnam.