SINGAPORE, Oct 1 — A Singapore court has blocked attempts by foreign liquidators to recover funds linked to the 1Malaysia Development Bhd (1MDB) scandal, dealing a setback to Malaysia’s wider efforts to recoup billions lost from the state-owned investment fund.
The High Court ruled that Standard Chartered and BSI Bank cannot be sued in Singapore over transactions tied to 1MDB because the country’s cross-border insolvency law does not cover deals made before 2018, The Straits Times reported.
Liquidators for Blackstone Asia Real Estate Partners and Brazen Sky — companies implicated in the 1MDB scheme — had sought to reverse suspicious transfers through avoidance claims, a legal tool often used to recover assets for creditors.
These legal moves are part of Malaysia’s broader international campaign to trace and reclaim billions allegedly siphoned from the state fund in what remains one of the world’s biggest financial scandals.
Justice Aidan Xu dismissed the applications, citing Article 23(9) of Singapore’s Insolvency, Restructuring and Dissolution Act 2018, which incorporates the Model Law on Cross-Border Insolvency.
He said the provision, which is unique to Singapore, explicitly prevents foreign liquidators from challenging transactions made before the law was enacted.
The judge acknowledged that this ruling limits Malaysia’s recovery options despite evidence of “apparently dubious transactions”, and that any alternative legal routes would require more time and resources.
Xu added that while the decision may appear inconsistent with Singapore’s support for cross-border cooperation, Parliament had intentionally 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 prevent those involved in the 1MDB scheme from escaping accountability, but the court sided with the banks’ interpretation of Article 23(9).
Xu said that any change must come from lawmakers, though Malaysia-linked liquidators can still pursue conventional legal claims, with Brazen Sky already suing BSI and several bankers for dishonest assistance.
