PETALING JAYA: Malaysia today filed an application in the London High Court to challenge the outcome of an arbitration between 1MDB and International Petroleum Investment Company (IPIC), in an effort to relieve the government of paying the remaining US$4.3 billion as part of a settlement agreement reached at the London Court of International Arbitration last year.

“The basis of Malaysia’s legal challenge in the High Court in London is that the consent award was procured by fraud or in a manner contrary to public policy,” Attorney-General Tommy Thomas said today.

Under the consent award, Malaysia had agreed to pay US$5.78 billion to the Abu Dhabi state company over a five-year period.

It has so far paid US$1.46 billion, with the next interest payment of US$50 million due on Nov 11.

“Fraud is an established ground to challenge the consent award for public policy reasons,” Thomas said.

The arbitration was conducted under the Rules of the London Court of International Arbitration, between IPIC and Aabar Investments PJS as the claimants, and 1MDB and the Minister of Finance Inc as respondents.

Thomas said the application took into account allegations by the US Department of Justice (DoJ) against former prime minister Najib Razak who was the “ultimate decision-maker in 1MDB”.

Thomas said both IPIC and Aabar were aware of the allegations before the DoJ’s announcement in July 2016 that it was applying to freeze billions of dollars in assets linked to 1MDB and “purchased by fraudsters from stolen proceeds”.

“In such circumstances, Malaysia takes the position that IPIC and Aabar were aware of the fraud of Najib Razak. He was principally responsible for 1MDB and Minister of Finance Inc consenting to the award,” said Thomas.