KUALA LUMPUR, A Singapore court has ruled that foreign liquidators cannot sue Standard Chartered Bank and BSI Bank over 1Malaysia Development Bhd (1MDB)-linked transactions that took place before 2018, the year Singapore’s cross-border insolvency law came into effect.
The liquidators of Blackstone Asia Real Estate Partners and Brazen Sky — both linked to the 1MDB scandal — had sought to recover assets they claimed were improperly transferred, using avoidance claims to challenge the deals.
However, High Court judge Aidan Xu cited Article 23(9) of Singapore’s Insolvency, Restructuring and Dissolution Act, which bars such claims for transactions made before 2018. While acknowledging the transactions appeared “dubious,” he said the law clearly prevents the court from intervening, stressing that any change would have to come from Parliament.
The liquidators argued that Article 21 of the law should allow the court to act on past fraudulent deals, warning that otherwise wrongdoers might escape liability. The banks, however, maintained that Parliament had intentionally added Article 23(9) to protect the finality of earlier transactions. Xu agreed, ruling that Article 21 cannot override the restriction.
The decision narrows the scope of action available to foreign liquidators under Singapore’s model law framework but does not prevent them from pursuing claims through regular court channels, which are lengthier and more complex. Brazen Sky has already filed separate suits against BSI Bank and certain bankers, alleging dishonest assistance in the same transactions.
In response, Angela Barkhouse, joint liquidator of Blackstone Asia Real Estate Partners, said they respect the ruling but noted that the judge himself admitted the outcome may not align with the spirit of the UN’s model law. She added that her team is considering other legal avenues, including a possible appeal. “We remain undeterred in our mission to recover assets from those responsible and maximise returns for Malaysia,” she said.
