1MDB in Talks to Settle US$1.83 Billion Lawsuit with Deutsche Bank
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1Malaysia Development Berhad is negotiating a settlement with Deutsche Bank Malaysia Berhad over a US$1.83 billion lawsuit filed in Kuala Lumpur. Counsel for the fund confirmed the talks to the Federal Court.
Legal counsel Datuk Lim Chee Wee disclosed the talks before a three-member Federal Court panel led by Chief Judge of Malaya Datuk Seri Hashim Hamzah. High Court Judicial Commissioner Rihada Rafie will hear the proposed agreement on October 26. Financial terms remain undisclosed.
Details of the Multi-Billion Dollar Claim
The state investment vehicle filed the suit on May 7, 2021, targeting seven defendants. It alleged breach of contract, negligence and criminal conspiracy linked to stolen company funds. The original filing named Deutsche Bank (Malaysia) Berhad, Coutts & Co, JP Morgan (Switzerland), Petrosaudi International, Petrosaudi Holdings (Cayman), Tarik Obaid and Patrick Mahony.
Court filings alleged the defendants assisted in fraudulent transactions that caused heavy capital losses and damaged the fund’s reputation. 1MDB dropped JPMorgan and Coutts & Co from the lawsuit on November 13 last year, narrowing the scope of the case.
Federal Court Weighs Evidence in White & Case Appeal
Alongside the Deutsche Bank negotiations, the Federal Court panel addressed 1MDB’s application for leave to appeal a separate ruling involving London law firm White & Case LLP. Chief Judge of Sabah and Sarawak Datuk Seri Azizah Nawawi and Federal Court Judge Datuk Ravinthran N. Paramaguru completed the three-member bench.
“Judicial Commissioner Rihada Rafie will take up the proposed settlement terms between 1MDB and Deutsche Bank at the Kuala Lumpur High Court on October 26.”
Counsel for White & Case, Datuk Dr Cyrus Das, objected to 1MDB submitting more than 3,000 pages of supplementary documents. Khoo Guan Huat, another counsel for 1MDB, stated that the records were raised during earlier case management. The apex court admitted the documents. It also directed the filing of affidavits and ordered immediate case management to fix a hearing date.
Jurisdictional Rulings and Institutional Risk
On August 20, the Court of Appeal overturned a High Court decision that allowed 1MDB’s fraud claim against White & Case to proceed locally. The appellate judges ruled that Malaysian courts lacked jurisdiction over the foreign firm. Filed in 2024, that suit sought US$1.83 billion plus US$33 million in consequential losses from White & Case and Mahony over allegations of assisting PetroSaudi during advisory mandates.
Jurisdictional disputes have complicated Malaysia’s efforts to pursue international financial intermediaries and legal advisers abroad. For institutional banks and advisory firms in Southeast Asia, negotiated settlements provide legal finality while avoiding protracted discovery across multiple countries.
Next Steps in the Recovery Proceedings
Global investigations into billions of dollars siphoned from 1MDB previously spurred asset recovery actions across Malaysia, Singapore, Switzerland and the United States. Settlements with major banks have driven Malaysia’s broader recovery efforts in recent years.
Judicial Commissioner Rihada Rafie will take up the proposed settlement terms between 1MDB and Deutsche Bank at the Kuala Lumpur High Court on October 26.
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