PUTRAJAYA: The Court of Appeal has unanimously ruled that the High Court lacked the jurisdiction to hear 1MDB’s suit against UK law firm White & Case LLP over alleged assistance and conspiracy linked to transactions involving PetroSaudi International Ltd.
Justice K Muniandy, who delivered the broad grounds of judgment today, said the requirements under the Courts of Judicature Act 1964 and the Rules of Court 2012 for service of proceedings outside Malaysia had not been satisfied.
The bench also allowed White & Case’s appeal and set aside the writ served against the firm.
Muniandy said the first defendant, Patrick Mahony, who resides abroad, could not serve as a proper “anchor defendant” to justify service of the proceedings out of jurisdiction.
He also said the defect could not be cured retrospectively.
The judge added that the 2024 suit was filed out of time under the Limitation Act 1953, noting that the alleged losses and fraud involving the state investment fund had already been made public in 2015 and 2016.
Under the Limitation Act, a plaintiff is generally required to commence proceedings within six years from when the cause of action accrued.
The Court of Appeal also set aside the High Court’s decision to consolidate 1MDB’s suit against White & Case with a separate action against Deutsche Bank involving US$1.11 billion.
Muniandy said the consolidation application was a tactical manoeuvre by 1MDB to cure the jurisdictional defect.
Justices Alwi Abdul Wahab, who chaired the three-member bench, and Aliza Sulaiman heard submissions from both sides on June 10 before judgment was reserved.
The court ordered 1MDB to pay RM130,000 in costs to White & Case.
1MDB filed the suit at the Kuala Lumpur High Court, seeking US$1.83 billion and US$33 million in damages from White & Case and Mahony, a director of PetroSaudi.
The fund alleged that White & Case, which acted as legal counsel for PetroSaudi, assisted the Saudi-based company and others to commit fraud and conspiracy against 1MDB.
The allegations concerned two corporate transactions: a 2009 joint venture between 1MDB and PetroSaudi and the restructuring of 1MDB’s stake in the venture in 2010. 1MDB claimed the transactions resulted in substantial financial losses.
The High Court previously ruled that Malaysia was the proper forum to hear the dispute, describing the country as the “centre of gravity” of the case. It also allowed 1MDB’s application to consolidate the suit with its separate action against Deutsche Bank.
Cyrus Das, Shamala Devi Balasundaram, Siow Poh Ching and Pang Khai Shean appeared for White & Case. Lim Chee Wee, Elizabeth Lau, Hazel Siau, Soh Lip Shan and Lim Zhi Ying represented 1MDB.
Following the ruling, Lim told the bench that he had instructions from his client to seek leave from the Federal Court to appeal on the merits of the case.
