Abu Dhabi's Ipic seeks $6.5 billion from 1MDB, Malaysia in arbitration bid

Abu Dhabi fund International Petroleum Investment Company (Ipic) is seeking $6.5 billion in claims from Malaysia’s troubled state investment company 1Malaysia Development and the nation’s finance ministry.

Ipic and its unit Aabar Investments have submitted a request for arbitration to the London Court of International Arbitration, according to a London stock exchange filing.

“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. “The claim will be determined by an arbitral tribunal that will comprise of three arbitrators.”

The Malaysian investment fund and Ipic are locked in a tussle that spilled over to repayments on bonds issued by 1MDB. That led to a default in April, adding to the financial scandals for the Malaysian company that’s already a target of global probes into alleged money laundering and embezzlement. 1MDB has denied wrongdoing.

1MDB didn’t immediately reply to an email and phone calls seeking comment. A Ministry of Finance spokeswoman couldn’t immediately be reached for comment.

Ipic entered into an agreement with 1MDB in May 2015 to provide the Malaysian fund $1bn to settle some liabilities in exchange for a transfer of assets, and assume interest obligations on $3.5bn of debt. 1MDB and Malaysia’s finance ministry “are in default” on the terms of a binding term sheet, Ipic said in April.

Ipic, which had guaranteed two sets of 1MDB debt, made payments after the Malaysian company missed them in April and May. 1MDB reiterated to bondholders last month its commitment to resolving the dispute.

A report by a Malaysian parliamentary committee in April identified at least $4.2 billion of questionable transactions by 1MDB, including those involving the Abu Dhabi companies. The bipartisan group said it couldn’t verify a $2.1 billion payment to Aabar Investments.

Ipic has denied ownership of the company that received the funds known as Aabar Investments, or Aabar BVI. 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.


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