“With this settlement, Malaysia and Abu Dhabi look forward to continue working together for the prosperity and economic benefit of both countries in the future,” the finance ministry said in a brief statement today.
Both sides were embroiled in a legal fight in London’s courts with claims that IPIC and Aabar were complicit in the 1MDB fraud.
Putrajaya had challenged the 2017 arbitration settlement between the two sides in the UK, arguing that IPIC and Aabar Investments were aware of fraud allegations against former prime minister Najib Razak at the time the deal was struck.
IPIC guaranteed two separate dollar-denominated bonds for 1MDB in 2012 in deals arranged by Goldman Sachs Group Inc. that raised US$3.5 billion.
In 2019, Putrajaya’s bid to challenge the US$5.78 billion settlement between 1MDB and IPIC in a London court was put on hold by judge Robin Knowles to allow further arbitration.
Knowles ruled that he would grant a “temporary” stay of “indefinite duration” over Malaysia’s claim that its agreement to the settlement should be overturned, as it was “procured by fraud”.
Malaysia’s then attorney-general, Tommy Thomas, said Najib was “principally responsible” for consenting to the US$5.78 billion award and “could not possibly have acted in the best interests of his country and his company”.
He sought to recover the US$1.46 billion already paid and relieve Malaysia of any obligation to pay the remainder.
In November 2021, Putrajaya was given the go-ahead by a London judge to continue its pursuit against IPIC, Abu Dhabi’s sovereign wealth fund, for its role in the 1MDB scandal.
Judge Andrew Baker granted an extension of time for the claim to be properly served to bring this “unusual” case to a full trial, saying that while it was undoubtedly an exceptional length of extension to grant, “this is an exceptional case”.
The London case was one of a series of legal and regulatory probes around the world, including the US and Malaysia, surrounding 1MDB.
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