Court allows Equanimity sale pending ownership litigation

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KUALA LUMPUR (Aug 24): The superyacht Equanimity, which is linked to Low Taek Jho — the alleged mastermind behind 1Malaysia Development Bhd's troubles — may find a new owner "in the next two or three months" after a Malaysian court granted an application to facilitate the sale of the vessel today.

The Malaysian High Court has today allowed an application by 1MDB and the Malaysian government to expedite the sale of the yacht, believed to be acquired for US$250 million using money siphoned from the troubled state fund.

However, it should be noted that the court has yet to decide on the ownership of the sale proceeds, according to lawyers involved in the application.

The application to sell Equanimity was made by 1MDB, its subsidiaries 1MDB Global Investment Ltd and 1MDB Energy Holdings Ltd, and the Malaysian government, against the "owner of Equanimity from Cayman Islands" on Aug 23.

The hearing, which took about 90 minutes today, was conducted in front of High Court judge Khadijah Idris, while shipping lawyers Jeremy Joseph and Ong Chee Kwan were among those present to represent the plaintiffs.

No representative for the defendant, Equanimity (Cayman) Ltd, was present at court.

In the application, the plaintiffs asked for the sale of the ship, bunkers, fuel, lubricants and other consumables on board to be conducted via public tender or private treaty by the Admiralty Court sheriff.

They also wanted the sheriff to receive bids or offers for the vessel and the bunkers and for the purchase price to be paid to the sheriff in US dollars or euros or ringgit.

Speaking to the press after today's hearing, Joseph said the next step in relation with the sale is to conduct a valuation and a condition survey on Equanimity.

"Subsequently, we will be speaking to specialist brokers… ultimately the goal is to sell the vessel for the best possible price," said Joseph, who declined to speculate on the yacht's possible selling price.

Equanimity, which reportedly costs around RM3 million a month to maintain, is currently under the custody of the Admiralty Sheriff, said Joseph.

As such, proceeds from the sale will be partly used to reimburse the maintenance cost currently borne by the sheriff, he added.

1MDB and the government first filed for a writ of summons against Equanimity (Cayman) Ltd on Aug 6, and obtained a warrant of arrest from the Admiralty Court against the vessel, which arrived on Malaysian shores the next day.

The plaintiff claimed that Equanimity was acquired at US$250 million by Low Taek Jho or Jho Low, using funds stolen from 1MDB Energy.

The defendant has already missed the Aug 20 deadline to claim the vessel — but it can still contest the ownership of the sales proceeds, said Ong.

"Anybody who is interested in [claiming ownership over] the proceeds from the sale can come to court," said Ong.

"[But] We have not been approached by anybody, no law firm has entered into appearance on behalf of the defendant. The next step [for us] of course is to go for an application for judgement in default," he added.

A judgement in default is basically a binding judgement in favour of either party based on a failure to take action by one party, such as failing to respond to summons or failing to appear before the court of law.

Contrary to a recent statement by Equanimity (Cayman) Ltd, Ong said the plaintiffs have served a notice of application to the supposed vessel owner on Wednesday (Aug 22).

Equanimity (Cayman) Ltd earlier today claimed it had not received a legal notice on the application hearing.

In a statement, it also said the move is a 'violation of due process and international legal comity' considering it was done despite the California Central District Court decision for US authorities to bring the yacht home for an interlocutory sale.

Interested buyers will not be implicated in the ongoing court case despite the prevailing question over the ownership of the vessel, Joseph stressed.

"Under an admiralty sale, The buyer of the vessel will be free of all encumbrances... So there is no issue at all," he said.