On Tuesday 26 November, the Court of Appeal handed down judgment in the case of Minister of Finance (Inc) & anr v International Petroleum Investment Company & anr  EWCA Civ 2080, allowing the Appellants’ appeal.
The case arises out of the well-known 1 MDB scandal, concerning allegations that a multi-billion dollar fraud was carried out against 1MDB, a Malaysian state-owned investment fund. These allegations have given rise to legal proceedings in various jurisdictions, including ongoing criminal trials of Malaysia’s former Prime Minister, Najib Razak, and widely publicised forfeiture proceedings in the United States.
In the English Courts, 1MDB and another Malaysian entity have applied to set aside a Consent Award which settled a London arbitration. They say that this Consent Award was part and parcel of the fraud and formed part of an attempted cover-up by Mr Najib and his fellow conspirators. In response to that application to the English Courts, the Respondents began two new arbitrations against the Claimants, seeking declaratory relief that the settlement was valid and payment of very substantial sums which they allege have fallen due pursuant to the settlement deeds, in particular because of the application to set aside the Consent Award.
The Claimants sought an anti-arbitration injunction on the basis that the new arbitrations infringed the Claimants’ rights in respect of the English Court process and are vexatious and/or oppressive. At first instance the Judge refused the application for an injunction and instead granted the Respondents’ application to stay the English Court proceedings on case management grounds to allow the new arbitrations to proceed first. The judgment is here.
The Appellants appealed both aspects of that judgment and the Court of Appeal, in a judgment of the Court delivered by Sir Geoffrey Vos, has allowed that appeal. It held both (i) that no case management stay of the English Court proceedings should have been granted and (ii) that the anti-arbitration injunction should be granted, because the new arbitrations threatened or infringed the Appellants’ rights in respect of the English Court process and were vexatious or oppressive. The Court of Appeal judgment is here.
The Judgment discusses the role of the English Court’s powers as the supervisory court of an English seated arbitration.