1MDB granted retrial in claim against Jho Low and his father for higher compensation

Highlights

The Court of Appeal set aside the US$3,782,637,525 default judgment against Jho Low and his father, ordering a retrial over issues of natural justice.
The retrial allows 1MDB and four subsidiaries to refile claims for higher compensation against Jho Low and Larry Low.
The decision maintains a focus on 1MDB's asset recovery efforts and corporate judicial proceedings as it seeks to recover disputed funds.

This article was translated from the original. Read the original version by our correspondent here.

Appeal decision and issues of natural justice

As reported by The Edge Malaysia, a three-judge Court of Appeal panel led by Datuk Azhahari Kamal Ramli unanimously ruled that the case should be returned to the High Court for a full trial before a new judge due to issues of natural justice.

The panel also included Datuk Ahmad Kamal Shahid and Alice Loke. Low, better known as Jho Low, and his father, Tan Sri Larry Low Hock Peng, were absent and unrepresented in court.

Monday's decision arose from the actions of High Court judge Hayatul Akmal Abdul Aziz in November 2022, when she entered a default judgment against both defendants after striking out their defence and their original law firm withdrew from the case.

1MDB and its subsidiaries subsequently applied to the High Court to set aside the default judgment, but the application was dismissed for being filed late.

Implications for 1MDB's claim

The 2022 judgment ordered Low and his father to pay a total of US$3,782,637,525, together with annual interest of 5% on the respective sums, calculated from dates between 2010 and 2014 until full settlement.

With a retrial now permitted, 1MDB and its four units have an avenue to refile their claims in pursuit of greater compensation. In the context of corporate litigation and asset recovery in Malaysia, the decision maintains focus on due judicial process as government-linked companies continue pursuing the return of disputed funds.

The four subsidiaries involved are 1MDB Energy Holdings Ltd, 1MDB Energy Ltd, 1MDB Energy (Langat) Ltd, and Global Diversified Investment Co Ltd, formerly known as 1MDB Global Investments Ltd. 1MDB and its subsidiaries are represented by Lee Shih with the assistance of Priyadana Annadurai.

In our earlier article, we discussed how the impact of the 1MDB scandal continues to shape the debate on corporate governance in Malaysia, including board accountability when controls, audits and checks and balances fail. We also covered the civil actions by 1MDB and SRC International to recover assets, as well as the emphasis on whistleblower protection and the need for internal auditors to take a more proactive approach to identifying risks rather than merely assessing past failures.

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