Goldman Sachs Group sued Malaysia in a UK court on Wednesday, as tensions escalated over a settlement agreement on the bank's role in the multi-billion dollar 1MDB corruption scandal. "Today, we filed for arbitration against the Government of Malaysia for violating its obligations to appropriately credit assets against the guarantee provided by Goldman Sachs in our settlement agreement and to recover other assets," a spokesperson for the bank told Reuters.

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The arbitration has been filed with the London Court of International Arbitration, a source told Reuters. The lawsuit was earlier reported by Bloomberg News. The office of Malaysian Prime Minister Anwar Ibrahim and the Attorney General's Chambers did not immediately respond to a request for comment. The lawsuit comes less than two months after Anwar threatened to take Goldman to court. The two sides are in disagreement over a 2020 settlement agreement, in which Goldman Sachs had agreed to pay $3.9 billion to settle Malaysia's criminal probe over its role in the scandal.

Goldman is also required to make a one-time interim payment of $250 million if the Malaysian government has not received at least $500 million in assets and proceeds by August 2022, the bank said in a regulatory filing earlier this year. The two parties disagreed over whether Malaysia recovered at least $500 million as of August 2022 and whether any interim payment was due, Goldman has said.

Malaysian and U.S. authorities estimated $4.5 billion was stolen from sovereign wealth fund 1MDB in an elaborate scheme that spanned the globe and implicated high-level officials in the fund, former Malaysian Prime Minister Najib Razak, Goldman staff and others.

Prosecutors have said Goldman helped 1MDB raise $6.5 billion through bond sales and earned $600 million in fees.

The United States has been returning funds it has recovered from seized assets that were allegedly bought with stolen 1MDB money.