5 Things You Should Know About The Unresolved 1MDB And IPIC Dispute
IPIC is taking the dispute to London court.
By Tang Ruxyn — 15 Jun 2016, 10:34 AM
Abu Dhabi's International Petroleum Investment Co. (IPIC) has submitted a Request for Arbitration (RFA) to the London Court of International Arbitration (LCIA) after it failed to settle a debt payment dispute with 1Malaysia Development Bhd (1MDB)
The LCIA is one of the world’s leading international institutions for commercial dispute resolution.
The LCIA has access to the most eminent and experienced arbitrators, mediators and experts from many jurisdictions, and with the widest range of expertise. The LCIA's dispute resolution services are available to all contracting parties, without any membership requirements.
A registration fee is payable with the Request for Arbitration and, thereafter, hourly rates are applied by the arbitrators and by the LCIA.
lcia.org
1. IPIC is seeking USD6.5 billion (about RM25.5 billion) from the troubled Malaysian state investment company
"The failure of 1MDB and MOF to perform their obligations, cure their defaults or put forward acceptable proposals has left IPIC in the position where it must pursue its claims in arbitration," IPIC said in a statement.
"The total amount claimed by IPIC/Aabar is approximately USD6.5 billion," it added.
2. Last month, IPIC claimed that 1MDB and the Malaysian government owe it more than USD1.2 billion
1MDB has been locked in a dispute over its obligations to IPIC under a debt restructuring agreement reached in June last year.
The first default was in December when IPIC said 1MDB had failed to pay USD1.1 billion under the agreement, and the deal was terminated. The second was in April when 1MDB defaulted on the USD50.3 million interest payment on the USD1.75 billion on bonds due in 2022.
IPIC said it would step up its demands for 1MDB and the Malaysian government to compensate the Abu Dhabi firms USD1.2 billion, plus accrued interest.
3. Bloomberg reported that 1MDB didn’t reply immediately to an email and phone calls seeking comment
It added that attempts to reach a Ministry of Finance spokeswoman for comment were not successful.
4. However, 1MDB has issued an official statement yesterday, 14 June
In its statement, 1MDB acknowledged that IPIC and Aabar Investments PJS (“Aabar”) have submitted a Request for Arbitration to the London Court of International Arbitration.
It further states that 1MDB and its legal counsel will review the request for arbitration once it has been served with a copy.
1MDB also stressed that it has a strong liquidity position and is able to honour its current debt obligations.
5. Problems began when 1MDB made payments of USD3.5 billion meant for IPIC to a company named 'Aabar Investment PJS Ltd' (Aabar BVI). IPIC has denied ownership of the company.
IPIC’s unit has a slightly different name to the one that 1MDB transferred money to. 1MDB has said it negotiated "various legal agreements" with the previous heads of IPIC and Aabar, and called it a "surprising claim" that neither Gulf company knew of payments to Aabar BVI.
bloomberg.com