Najib, imprisoned since August 2022 in one of several cases related to 1MDB, has been seeking a judicial review to compel authorities to confirm the existence of and execute a royal order issued by former King Al-Sultan Abdullah entitling him to serve the remainder of his jail sentence under house arrest.

In a unanimous decision, the Federal Court, Malaysia's top tribunal, said on Wednesday it accepted that there was a royal document related to granting house arrest for Najib but it was not in a position to determine its authenticity.

Najib has said an addendum order accompanied a pardon by Al-Sultan Abdullah in January last year that halved his sentence from 12 years to six.

The case has stirred intrigue in Malaysia, with multiple government authorities, including members of the pardons board, for months denying knowledge of the document despite the former king's office saying an addendum had been issued.

The Federal Court's three-member panel said while it accepted the order's existence, it could not determine whether it was truly issued as part of the pardon.

The court declined a request by Najib's lawyer to hear further arguments, referring the case back to a lower tribunal.

"We remit the case to the High Court for the hearing of the substantive judicial review proceedings before a new judge," said Federal Court judge Zabariah Mohd Yusof.

Najib was found guilty in 2020 of criminal breach of trust and abuse of power for illegally receiving funds misappropriated from a unit of state investor 1Malaysia Development Berhad (1MDB).

Although some 1MDB-linked charges against him have been dropped, Najib is still awaiting a verdict in the biggest trial he faces over the scandal, with the court expected to hear closing arguments in October. He has denied all the charges against him.

Addendum’s existence undisputed

Wednesday's decision is expected to boost calls by Najib's party, the United Malays National Organization (UMNO), for him to be granted house arrest.

UMNO campaigned against current Prime Minister Anwar Ibrahim, but joined Anwar's coalition in government following a 2022 election that resulted in a hung parliament.

More than 100 people gathered outside the court complex on Wednesday to support Najib, who lost the 2018 election amid public anger over 1MDB.

Najib initiated his judicial review in April last year. The bid was initially dismissed by the Kuala Lumpur High Court, but was overturned on appeal in January, after Najib's lawyers produced a letter from the former king's palace saying there was an addendum.

The attorney-general's office appealed the decision questioning the document's admissibility.

A lawyer acting on behalf of the attorney-general told the court in July he did not dispute the document's existence, but was challenging the way in which it was being submitted as evidence.

The Federal Court said the concession by the attorney-general that the order existed had a significant impact on its decision on Wednesday.

"As of now, the addendum order exists and its status vis-a-vis its validity or whether it is true needs to be ascertained at a substantive hearing," judge Zabariah said.

The court fixed August 18 for the case to be heard at the High Court.