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2021 MarsdenLR 2773
HIGH COURT MALAYA KUALA LUMPUR
SRC INTERNATIONAL SDN BHD & ANOR – Appellant
Versus
DATO SRI MOHD NAJIB HJ ABD RAZAK – Respondent
[Suit No: WA-22NCvC-340-05/2021]
Court affirmed three key prerequisites for a Mareva injunction: a good arguable case, presence of assets within jurisdiction, and a real risk of asset dissipation.
Headnote:(A) Mareva Injunction – Plaintiffs sought an injunction to prevent the Defendant from removing or diminishing the value of assets in Malaysia up to RM42,000,000 pending litigation – Three pre-requisites for Mareva Injunction established – Good arguable case, assets in jurisdiction, and real risk of dissipation found satisfied. (Paras 21, 22, 56)
(B) The Defendant's arguments against the injunction regarding delay and adequate damages rejected; substantial evidence indicating potential asset removal considered persuasive. (Paras 74-86)
Facts of the case: Plaintiffs allege Defendant's involvement in misuse of RM42 million from SRC and GMSB, asserting fraudulent transfers link to CSR project through IPSB. (Paras 18-20, 34)
Findings of Court: Plaintiffs presented a good arguable case for breach of fiduciary duty and fraudulent misappropriation of funds. (Para 39)
Issues: Whether Plaintiffs proved the existence of a good arguable case, risk of asset dissipation, and adequacy of delay claims. (Paras 74-86)
Ratio Decidendi: Court emphasizes the importance of a good arguable case, scrutiny of evidence, and absence of delay in seeking an injunction to prevent asset dissipation. (Paras 21, 56)
Result: Injunction granted against the Defendant regarding asset management pending trial outcome. (Para 92)
JUDGMENT
A. Introduction
[1] This is the Plaintiffs' application for a Marejava Injunction against the Defendant that can be seen in encl 105.
[2] The Plaintiffs application seeks, among others, an order to prevent the Defendant from removing from Malaysia or from disposing of or diminish the value of any of his assets in Malaysia up to the value of RM42,000,000.00 pending the final determination or outcome of the action commenced against the Defendant.
[3] After hearing the parties, I granted the orders sought by the Plaintiffs subject to various amendments regarding time to enable the Defendant to comply with the terms of the orders.
B. Summary Of The Plaintiffs Claim
[4] The First Plaintiff ("SRC") is a wholly-owned subsidiary of the Ministry of Finance (Incorporated) ("MOFI"). It was originally incorporated as a private limited company by 1Malaysia Development Berhad.
[5] The 2nd Plaintiff ("GMSB") is a wholly owned company of SRC.
[6] The Defendant was the Prime Minister of Malaysia and was also the Minister of Finance.
[7] The Plaintiffs contend that the Defendant was at all material times the Chairman of the Board of Advisors of 1MDB and the Advisor Emeritus of SRC from 1 May 2012 to 4 March 2019.
[8] This case revolves the loans that were obtained by SRC from KWAP (i) to the sum of RM4 billion pursuant to two (2) Facility Agreements dated 16 August 2011 and 27 March 2012. The said loans were guaranteed by the Government of Malaysia by the two (2) letters of Guarantee dated 26 August 2011 and 7 March 2012. The details of these loans are contained in the Plaintiff's Statement of Claim and the Affidavit in Support affirmed by Nur Syafinaz binti Abdullah.
[9] It is the Plaintiffs case that the said loans were obtained due to the power and influence of the Defendant and at the behest of Nik Faisal Ariff Kamil ("Nik Faisal").
[10] The Plaintiffs contend that the Defendant was the ultimate person in charge of SRC and he had control over the board of the company.
[11] The Plaintiffs contends that between December 2014 to April 2015, SRC via its AMislamic Bank Berhad Account number 2112022010650 ("SRC AMislamic Account 650") or through GMSB, via its Amislamic Bank Account number 8881003806948 ("GMSB AMislamic Account") disbursed funds to the sum of RM123 million to a company known as Ihsan Perdana Sdn Bhd ("IPSB").
[12] It was alleged that IPSB was appointed via letter dated 3 September 2014 as SRC's Corporate social responsibility partner. This programme was intended to benefit Malaysians and that all disbursements of sums would be made to IPSB via a grant to the said company to the sum of RM250 million.
[13] The Plaintiffs go on to claim that between December 2014 and February 2015, a total sum of RM42 million was transferred to the Defendant's account bearing numbers 211202201196 and 2112022011880 held with AmIslamic Bank.
[14] It was also alleged that between April 2015 to July 2015, IPSB then transferred further the sum of RM44,010,252.50 to third parties purportedly for CSR purposes.
[15] The Plaintiff contends that the payments of the sums from SRC or GMSB or from Jendela Pinggiran Sdn Bhd to IPSB were not approved by the Board of Directors and were made without the knowledge of their board of directors of the aforesaid companies.
[16] For the purpose of the Mareva Injunction sought by the Plaintiffs, the main crux of their claim lies on the sum of RM42 million that was allegedly paid to the accounts of the Defendants from SRC and GMSB through IPSB.
[17] The Plaintiffs allege that the said transfer of monies was wrong and was made purportedly as part of a grand design to defraud the said companies. They contend that the alleged fraud only came to light after the Defendant had to resign from the position as Prime Minister of Malaysia and as the Minister of FInance due to the 2014 General Election results.
[18] The Plaintiffs further contend that the Defendant is guilty of the following:
(i) Breach of Fiduciary dutie
