By ABC Papua New Guinea correspondent Liam Cochrane
|Photo: Peter O'Neill initially welcomed the public prosecutor's request for a Leadership Tribunal. (ABC)|
A court in Papua New Guinea has postponed a tribunal into alleged misconduct by prime minister Peter O'Neill until after the Supreme Court rules on whether the correct steps were taken to set up the tribunal.Mr O'Neill, who was due to face a leadership tribunal on January 26, is accused of bypassing proper procedures to secure a $1.3 billion loan from UBS bank to buy Oil Search shares for the PNG government.
The prime minister denies any wrongdoing.
His legal team, led by Queensland QC Mal Varitimos, argued that the public prosecutor exceeded his powers in the way he referred the matter for tribunal and therefore the tribunal has no jurisdiction.
"I conclude that, yes, the questions should be referred to the Supreme Court," Justice David Cannings said.
"Indeed I am obliged to refer them."
A leadership tribunal is an ad hoc body that has the power to dismiss, suspend or fine leaders found guilty of misconduct.
Several members of parliament were referred to leadership tribunals without challenge last year.
In Mr O'Neill's case, the public prosecutor requested more information from the ombudsman and subsequently changed the allegations of misconduct.
Justice Cannings ordered an interim injunction on the tribunal while the Supreme Court considers whether the public prosecutor's actions were constitutional.
"The sitting of the second defendant [the retired Australian, New Zealand and PNG judges on the leadership tribunal] scheduled for 26 January 2015 at 9.30am is vacated," Justice Cannings said
The leadership tribunal is separate to accusations of official corruption against the prime minister.
Mr O'Neill was served with an arrest warrant in June in relation to a fraud case by the country's anti-corruption body.
He is also challenging those allegations in court.
The former Australian colony of Papua New Guinea has become an increasingly important ally for Canberra, hosting the Manus Island asylum seeker detention centre and receiving $517 million in aid this year.