Although threatened with bankruptcy, jailed ex-deputy premier Anwar Ibrahim ( left ) has refused to settle the legal costs payable to Prime Minister Dr Mahathir Mohamad ( right ) after the court dismissed his RM100 million defamation suit against his former-mentor-turned-nemesis.

Anwar said it would be against his principle to pay the cost of Mahathir's defence and that he was prepared to face any adverse consequences for his actions.

His lawyer Sankara Nair told malaysiakini that Anwar made the decision upon learning that Mahathir had demanded payment of RM35,381 as his defence cost in the Court of Appeal which had dismissed Anwar's appeal against the High Court's decision to strike out the suit without hearing its merits.

Sankara said Mahathir, through his solicitor Messrs Adnan, Subra and Low in Kuala Lumpur, had sent several letters demanding for the money to Messrs Karpal Singh & Co as Karpal had act as Anwar's counsel in the civil suit.

He said Karpal will relay Anwar's decision to Mahathir's lawyers soon.

Bankruptcy threat

Sankara said the latest letter of demand dated Sept 5, 2002 revealed that Mahathir had already instructed his lawyers to take out a bankruptcy proceeding against Anwar as their earlier demand for the costs had not been met.

"When I informed Anwar of the threat by Dr Mahathir to take out bankruptcy proceedings if the cost is not paid, Anwar strongly feels that he should not pay. He told me that it was as a matter of principle that he will not succumb to the demand.

"He said he has no choice but to risk being declared a bankrupt. He was willing to take that chance but he would never compromise his principle. As he always maintained, he had been defamed by Dr Mahathir," Sankara said.

When contacted today, Anwar's wife Dr Wan Azizah Wan Ismail who is also Keadilan president, said she concurs with the decision and that Anwar was right to defend his principle.

On April 26, Court of Appeal deputy registrar Mohamad Nasir Yahya ordered Anwar to pay the sum as costs over his failed appeal against the High Court decision to strike out his libel suit against the premier.

The sum is in addition to the RM103,773 which Anwar was also ordered to pay Mahathir last year after his failed attempts at the High Court and the Federal Court to strike out his appeal against the Court of Appeal decision.

Detained under ISA

Anwar was sacked by Mahathir as deputy premier on Sept 2, 1998 on the grounds of immorality and detained 18 days later under the Internal Security Act (ISA) after leading mass anti-government protests in the city.

Two days after Anwar's arrest, Mahathir called a press conference to give his reasons for the sacking.

In January 1999 Anwar filed the suit claiming that Mahathir defamed him during the press conference knowing that he was in detention and unable to reply to the statements to defend himself.

But a High Court judge in August 1999 ruled it was Mahathir's right as prime minister to comment on the reasons for the dismissal. Both the Appeal Court and Federal Court have upheld the decision.

Anwar is serving a total of 15 years in jail after being convicted for abuse of power and sodomy. The Federal Court denied his appeal against the conviction for abuse of power in July. He has filed a review against that decision.

Since his sacking, Anwar had continually maintained that he was framed to avert a political challenge to Mahathir. Mahathir had denied this charge.

No demand yet

Karpal said that no demand had been made for the defence costs for the proceedings at the High Court and the Federal Court.

The Malaysian Bankruptcy Act allows a person to file a bankruptcy notice at the High Court against any individual for failure to settle debts exceeding RM10,000.

The petitioner will have to serve the notice to the defendant personally within three months and upon receiving it, the recipient must make a reply or any counter claim within seven days.

The court will then fix a date for hearing and the alleged bankrupt person will have to attend court to make his explanation before a final decision is made.

A person who has been declared a bankrupt will have all his financial affairs managed by an official assignee until the amount demanded is duly settled.