UAE's IPIC takes 1MDB dispute to London court

Dubai

ABU Dhabi's state-owned International Petroleum Investment Co (IPIC) said on Tuesday it has asked a London court to arbitrate in a dispute with Malaysian state fund 1Malaysia Development Berhad (1MDB) in which IPIC is claiming about US$6.5 billion.

The submission to the London Court of International Arbitration alleges that 1MDB and Malaysia's Ministry of Finance (MOF) failed to perform their obligations under a debt restructuring agreement involving the companies last June. "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 total amount claimed by IPIC/Aabar is approximately US$6.5 billion," it added.

1MDB said in response that it would review the request for arbitration once it has been served with a copy.

Under a deal signed in June, IPIC agreed to loan US$1 billion to 1MDB and assume payments on US$3.5 billion of 1MDB debt. It also forgave an undisclosed amount of debt that 1MDB owed to IPIC, in exchange for assets which have not been identified. But IPIC said in April that 1MDB was in default of that agreement, after the Malaysian fund failed to repay the loan.

1MDB subsequently defaulted on interest payments on two bonds, which IPIC had guaranteed. The Malaysian fund said that it has sufficient funds to make the interest payments, but did not due to its dispute with IPIC. The finance ministry did not immediately comment. REUTERS