1MDB in Talks to Settle US$1.83 Billion Lawsuit with Deutsche Bank

2 min readOct 13, 20265:10 PM

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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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What this means

The ongoing settlement talks between 1MDB and Deutsche Bank Malaysia over a US$1.83 billion claim signal a pragmatic shift towards resolution for the state fund. This approach, aiming for legal finality without protracted discovery, is likely to work, reducing uncertainty for both parties. It pressures other defendants, particularly those not yet dropped, to consider similar negotiated settlements rather than lengthy court battles. While 1MDB previously dropped JPMorgan and Coutts & Co from this specific lawsuit, this move contrasts with earlier efforts to pursue international entities through the courts, as seen with the White & Case appeal where Malaysian courts were ruled to lack jurisdiction over the foreign firm. This negotiation represents a different strategy for recovery efforts. Retail executives should now watch for the specific terms revealed on October 26.

Rajiv Menon

Questions & Answers

Which specific allegations did 1MDB make against Deutsche Bank Malaysia Berhad in its lawsuit?

1MDB alleged breach of contract, negligence, and criminal conspiracy against Deutsche Bank Malaysia Berhad. These claims were linked to stolen company funds, which the defendants allegedly assisted in fraudulent transactions, causing heavy capital losses.

Which other entities were originally named in the lawsuit alongside Deutsche Bank?

The original lawsuit named Coutts & Co, JP Morgan (Switzerland), Petrosaudi International, Petrosaudi Holdings (Cayman), Tarik Obaid, and Patrick Mahony. However, 1MDB later dropped JPMorgan and Coutts & Co from the legal action.

What is the significance of the Federal Court's ruling regarding the White & Case appeal?

The Federal Court admitted over 3,000 pages of supplementary documents from 1MDB for its appeal against a ruling involving White & Case. This appeal addresses a previous decision that Malaysian courts lacked jurisdiction over the foreign law firm in a separate claim.

When is the proposed settlement between 1MDB and Deutsche Bank expected to be heard?

The proposed agreement between 1MDB and Deutsche Bank is scheduled to be heard by High Court Judicial Commissioner Rihada Rafie. This hearing will take place at the Kuala Lumpur High Court on October 26.

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