The US Department of Justice (DOJ) has filed civil forfeiture proceedings over US$330 million held on behalf of a client by a prominent London law firm.

Clyde & Co says the funds it holds represent the proceeds of standby letters of credit (L/Cs) that the court of appeal in London held a client was entitled to.

Entitled to L/Cs

The DOJ claims are funds are "traceable to an international conspiracy" - the multi-billion dollar 1MDB scandal surrounding a Malaysian development fund.

But a spokesman for the London lawyers says the funds "represent the proceeds of standby L/Cs that the court of appeal in London held a client was entitled to receive."

Underlying dispute

The spokesman was referring to a 2017 case involving Petroleos de Venezuela and PetroSaudi Oil Services concerning the use of two drill ships that PetroSaudi allegedly acquired with funds fraudulently obtained from 1MDB.

"The firm held those funds to the order of and at the direction of a tribunal in the context of an underlying dispute," he said.

Clyde & Co "holds itself to the highest professional and ethical standards and fully complies with all legal and regulatory obligations," the spokesman concluded.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.