Our Recent Dispute Resolution Matters

August 17, 2020

Upon resuming our operations on 4.5.2020, the Dispute Resolution (DR) practice led by Senior Partner, Datuk DP Naban and Head of DR, Rosli Dahlan have represented the firm’s clients in a number of significant briefs.

1) 1MDB-Goldman Sachs Settlement

On 24.7.2020, Malaysia concluded the USD3.9 billion settlement with Goldman Sachs, where Goldman Sachs agreed to pay USD2.5 billion cash and USD1.4 billion in asset value guarantee. In December 2019, the former Attorney General and the previous administration had made an offer of settlement to Goldman Sachs for USD4 billion which was rejected by Goldman Sachs. Instead, they counter offered only USD1.5 billion and subsequently, increased it to USD1.75 billion. This settlement represents a significant increase of 42% from the last offer. This settlement had become a great subject of controversy until the Minister of Finance made various disclosures in his Parliamentary winding up speech on 6.8.2020.

Read more at:

1. The Edge Markets: https://www.theedgemarkets.com/article/ph-government-sought-us4-billion-settlement-goldman-sachs-says-finance-minister

2. The Edge Markets: https://www.theedgemarkets.com/article/significantly-better-what-goldman-offered-previously-says-zafrul

Our firm was the lead solicitors for the 1MDB-Goldman Sachs’ settlement where Datuk Naban and Rosli Dahlan worked alongside the present Attorney General in negotiating and securing this historic settlement for Malaysians. This success was achieved through an intimate understanding of the workings of the Government and its various agencies.

2) Bersatu Suit

On 7.8.2020, the High Court dismissed the suit by former Prime Minister Tun Dr Mahathir and 4 others and upheld their expulsion from the Bersatu party. The injunction applied by Tun Dr Mahathir was also dismissed by the High Court.

Datuk Naban and Rosli Dahlan successfully represented Prime Minister Tan Sri Muhyiddin Yassin, Home Minister Dato’ Seri Hamzah Zainudin and Capt. (R) Muhammad Suhaimi Yahya. The High Court agreed with our counsel’s argument that Section 18C of the Societies Act 1966 prohibits litigation of internal party affairs before the courts.

The High Court also agreed that the Bersatu party cannot be named as a Plaintiff as Section 9(c) of the Societies Act 1966 prohibits a society from suing and being sued under its own name. Tun Dr Mahathir and 4 others were ordered to pay RM30,000 in cost.

3) PETRONAS Obtains Interim Stay Against IRB For Tax Claims

On 3.8.2020 and 10.8.2020, the High Court granted an interim stay to PETRONAS against the Inland Revenue Board (IRB) in respect of additional tax assessments for RM105 million and RM3.6 billion respectively.

Rosli Dahlan appeared with our Tax, SST & Customs partner S. Saravana Kumar as counsel for PETRONAS in the judicial review leave applications, which were opposed by the Attorney General’s Chambers and IRB.

The IRB raised the disputed assessments by alleging that PETRONAS had committed tax avoidance under Section 72(1)(a) of the Petroleum (Income Tax) Act 1967. PETRONAS denied the IRB’s allegations and contended that the IRB has no jurisdiction to commit an error of law that can cause adverse consequences to corporations. This is because the IRB had wrongly categorised what is potentially a transfer pricing matter under Section 72A of the Act as a tax avoidance when the transaction has been in practice over all the years.

Read more at:

1. The Edge Markets: https://www.theedgemarkets.com/article/high-court-grants-petronas-tnb-interim-stay-against-irb-multibillion-tax-claims

4) TNB Obtains Interim Stay Against IRB For Tax Claim

On 10.8.2020, Tenaga Nasional Berhad (TNB) obtained an interim stay against the IRB in respect of an additional tax assessment for RM1.8 billion.

The IRB had disallowed TNB’s claim for reinvestment allowance on the basis that TNB’s business does not qualify as a manufacturing activity under Schedule 7A of the Income Tax Act 1967. IRB’s position is contrary to the Federal Court’s decision in the Majlis Perbandaran Seberang Perai case where it was held that “the power station can be considered as a factory for the production of an article, that is, electricity just like any other manufacturing plants or factory that manufacture goods or articles.”

Rosli Dahlan appeared with the firm’s Tax, SST & Customs partner, S. Saravana Kumar, as counsel for TNB in the leave application which was opposed by the AGC and IRB.

Read more at:

1. Focus Malaysia: https://focusmalaysia.my/mainstream/petronas-tnb-get-interim-stay-against-billion-ringgit-tax-claims/

5) Sime Darby Plantation Successfully Reclaimed Its Melaka Land

In April 2019, Sime Darby Plantation Berhad (SDP) filed a judicial review application to challenge the compulsory acquisition of its 75-hectare land in Merlimau, Melaka by the state authority for a foreign company. The matter became controversial due to the alleged intervention of a royal personality.

Rosli Dahlan successfully obtained the leave for judicial review and a stay order which compelled the state authority to seek an amicable settlement with SDP. He was assisted by associate Dayana Najwa.

On 21.7.2020, SDP made a Bursa Malaysia announcement that the Melaka State Government had withdrawn the compulsory acquisition and that the Merlimau land is returned to SDP.

Read more at:

1. New Straits Times: https://www.nst.com.my/business/2020/07/610370/melaka-land-returned-sime-darby-plantation

2. The Edge Markets: https://www.theedgemarkets.com/article/sime-darby-plantation-holds-75ha-merlimau-land-after-reaching-amicable-settlement

6) Famous Blogger Apologises To PETRONAS

On 3.5.2020, blogger Syed Akbar Ali, published a defamatory article against PETRONAS in his blog post titled “Surat Pembaca : Some Points About Petronas (Malaysia’s Largest WALLPAPER supplier)”

Datuk Naban and Rosli Dahlan were instructed by PETRONAS to launch a libel action against the blogger. Our partners were assisted by associate, Dayana Najwa and pupil, Amiratu Al Amirat.

Consequently, on 22.5.2020, the blogger unreservedly and unconditionally posted a detailed apology to PETRONAS which was published prominently on the blogger’s page in the following terms:

Apology To Petroliam Nasional Berhad (PETRONAS) By Syed Akbar Ali 1. On 03.05.2020, I had published a blog post entitled “Surat Pembaca : Some Points About PETRONAS (Malaysia’s Largest WALLPAPER supplier)” on my blog through the link http://syedsoutsidethebox.blogspot.com/ (“Post”).

2. It has been pointed out to me by PETRONAS that the Post has defamed PETRONAS. Upon demand by PETRONAS on 12.05.2020, I hereby make an unconditional apology to PETRONAS whose essence of apology is as follows.

3. That I have defamed PETRONAS as such: 3.1 That PETRONAS is not transparent in disclosing its financial information to the public. This is untrue when in fact PETRONAS’ detailed financial and operational results for each year are published on their official website.

3.2 That PETRONAS is unable to justify its spending, when in reality, PETRONAS conducts a press conference with the media twice a year when it announces its 1st half and year-end performances where the media is welcome to ask any questions.

3.3 That PETRONAS is incompetent and inefficient in running its business as a result of being too comfortable. The fact is that despite the challenging market conditions, PETRONAS have achieved commercial and operational excellence. Its achievement in major milestones is announced yearly on its website.

3.4 That PETRONAS is not transparent in managing its affairs and in sharing their performance unlike other companies in the industry whereas in reality, a detailed breakdown of PETRONAS’ performance is made available on its website.

3.5 That the sole reason that PETRONAS is making profit is due to a monopoly and the absence of competitors in Malaysia. This is misguided since PETRONAS competes equally with other oil companies in the downstream retail sectors.

3.6 That PETRONAS’ achievement is confined within its domestic territory when in truth PETRONAS has expanded its footprint internationally. One of which is PETRONAS being the majority owner of Engen Petroleum, a South African oil company focusing on the downstream refined petroleum products market and related businesses.

3.7 That PETRONAS’ failure is attributed to its lack of skill, ability and business acumen when in truth PETRONAS has operations in over 50 countries worldwide, sustained its market position as one of the largest LNG players globally and is continuing to craft its long-term plan to boost its growth.

3.8 Insinuated that PETRONAS’ line of leaders is incompetent and incapable. In truth, PETRONAS’ leadership have secured its annual listing among the top 500 countries on Fortune 500. The President and Group CEO of PETRONAS have also been listed among the top global Brand Guardian for 2020. In addition to that, the world’s leading brand valuation authority, Brand Guardians have recognized PETRONAS’ CEO as the only ASEAN CEO and sole Oil & Gas CEO from Asia in the list of 100 best global Brand Guardians for 2020.

4. I deeply regret that those defamatory statements were ever published and recognize the adverse impact of the Post which has damaged PETRONAS’ reputation and goodwill. I unreservedly withdraw those statements and the suggestions conveyed by them and once again unequivocally and unconditionally extend my sincerest apology to PETRONAS for my mistake and the incorrect content in the Post.