KUALA LUMPUR: A lawsuit against Goldman Sachs will validate the concerns raised by Datuk Seri Anwar Ibrahim on the 1Malaysia Development Bhd (1MDB) amount settled between the previous government and the US investment bank which he deemed as "too small" and was done in a haste.
Legal experts opined that the Prime Minister did not rule out the possibility of a lawsuit because he was not satisfied with the amount agreed between both parties when they reached the settlement in 2020.
Malaysia International Humanitarian Organisation secretary-general Datuk Hishamuddin Hashim said the prime minister may have evidence that the actual amount that should be returned by Goldman Sachs should be higher than what was agreed upon with the previous administration under Tan Sri Muhyiddin Yassin.
"He is of the opinion that the agreed amount for settlement is not sufficient, he claimed the amount should be higher in which he may have evidence on the matter.
"If Anwar proceeds with a lawsuit, it means that the agreed settlement made earlier will be halted until a court decision is reached and decided.
"Anwar's lawsuit may go in his favour if he can prove grave injustice 1MDB and Malaysian government on the amount agreed for the settlement.
"The previously agreed settlement can be made null and void based on the factor of grave injustice to the Malaysian government and a new settlement shall be proposed," Hishamuddin told the New Straits Times.
In 2020, Goldman Sachs settled with Malaysia by agreeing to pay US$2.5 billion in cash and guaranteeing the return of US$1.4 billion in assets, in exchange for dropping all criminal charges against the bank.
In an exclusive interview with CNBC recently, Anwar said he was "not discounting the possibility of proceeding again with the issue of lawsuits" against Goldman Sachs.
He said Malaysia was reevaluating the deal earlier this year as he claimed the sum agreed by both parties was too small.
Malaysian Bar former president Christopher Leong said 1MDB and/or the government would be able and entitled to bring civil action against Goldman Sachs under two circumstances.
One will be if the settlement that was made between both parties was with regards to criminal proceedings or liability only, and did not include any civil claims or potential civil claims.
Another will be where the settlement had included civil claims or potential civil claims, but Goldman Sachs has breached or not performed the settlement according to its terms.
"In the two scenarios above, Malaysia would not be going against the settlement previously reached," he said.
Despite potentially having a fresh lawsuit against it, Leong said Goldman Sachs was bound by the terms of the settlement agreement and was obligated to make the payments specified.
"Whether Goldman Sachs would be entitled to withhold payment of the US$1.4 billion in the event a civil suit is filed by 1MDB and/or the Malaysian government against it would depend on whether the settlement had included liability for civil claims or potential civil claims, and if so, then whether Goldman Sachs has nevertheless breached the terms of the settlement agreement, thus allowing civil claims to be filed against it.
"Any civil claim by 1MDB and/or the Malaysian government to recover losses resulting from the 1MDB saga is an indication that such losses have not been fully recouped thus far," said Leong, who is also the former president of the Law Association for Asia and the Pacific.
Hishamuddin said Goldman Sachs did not have the exclusive right or legal right or privilege not to return the assets to those assets that do not belong to it.
"They are bound by law to return the said assets," he added.