Singapore Court Blocks Foreign Liquidators From Suing Banks Over 1mdb Linked Deals

---

 The High Court rules that cross-border insolvency law cannot be applied to pre-2018 transactions, limiting recovery efforts tied to the scandal.
A Singapore court has barred foreign liquidators from suing Standard Chartered and BSI Bank over transactions linked to the 1MDB scandal. (Reuters pic)PETALING JAYA: The Singapore High Court has barred foreign liquidators from suing Standard Chartered and BSI Bank over transactions allegedly linked to the 1MDB scandal, in a ruling that could set back international efforts to recover billions lost from the state fund
The court ruled that the republic’s cross-border insolvency framework could not be retroactively applied to deals made before the Insolvency, Restructuring and Dissolution Act came into force in 2018, The Straits Times reported.
The liquidators of Blackstone Asia Real Estate Partners and Brazen Sky, both implicated in the multi-billion-dollar scandal, had sought to use “avoidance claims” to reverse suspect transactions and recover assets.
But Justice Aidan Xu dismissed their applications, citing Article 23(9) of the 2018 law.
The provision, unique to Singapore, explicitly prevents foreign liquidators from challenging pre-2018 transactions, even if they appear dubious.
“That is the law here in Singapore. The court must give effect to what that law lays down,” Xu was quoted as saying.
He acknowledged that the ruling left liquidators with limited options and said workarounds would require more time and cost.
He also acknowledged that the decision might appear inconsistent with Singapore’s broader commitment to facilitating cross-border insolvency cooperation, but said Parliament had deliberately included the 2018 cut-off when adopting the Model Law.
The liquidators argued that Article 21 of the law should allow them to sue over past transactions to hold those involved in the 1MDB scandal accountable, but the court sided with the banks’ interpretation of Article 23(9).
Nevertheless, Xu stressed that any change to the law must come from Parliament, not the courts.
The liquidators may pursue traditional proceedings in Singapore, although these lack the streamlined benefits of the cross-border regime.
Separate proceedings are also ongoing against BSI and certain bankers for dishonest assistance in relation to the same transactions. - FMT

---