Lawyer Shafee Abdullah told a three-member appeals court bench chaired by Justice Che Ruzima Ghazali that he has instructions to withdraw the appeal subject to one condition.
“We are withdrawing this appeal without prejudice to our right to take up the matter of the recusal at the main appeal should it become necessary,” said Shafee.
He said if the issue of Sequerah’s recusal is taken up now, there is a possibility the prosecution will argue that the defence cannot raise the matter again if the case comes up on appeal before the Court of Appeal.
“So, we want this court to record our stand in the event it becomes necessary later,” he said.
Shafee said the defence had elected to withdraw its present appeal, as former 1MDB general counsel Jasmine Loo has already testified at the trial.
He also told the court that Malaysian Anti-Corruption Commission investigation officer Nur Aida Arifin has also testified before the prosecution closed its case in May.
Deputy public prosecutor Kamal Baharin Omar said the prosecution accepted the condition of the withdrawal.
Che Ruzima, who sat with Justices Ahmad Zaidi Ibrahim and Azman Abdullah, then struck out the appeal.
“The defence may raise the recusal, if necessary, later,” he said.
Last year, Najib filed an application to recuse Sequerah from hearing his case after the judge disclosed that Loo and he were once partners at a law firm.
Loo is believed to be a former associate of fugitive financier Low Taek Jho, or Jho Low, the alleged mastermind behind the 1MDB scandal.
She was arrested and remanded by police for 1MDB-related investigations.
In his ruling, Sequerah said Najib failed to discharge his burden of proving that there was a real danger of bias if he continues to hear the trial.
He said Loo had resigned from the law firm about 15 years ago and there had been no communication between him and her on a personal or professional basis.
Najib is charged with 25 counts of money laundering and abuse of power over alleged 1MDB funds amounting to RM2.28 billion deposited into his AmBank accounts between February 2011 and December 2014.
The defence will continue its submission this afternoon.