A group of Australian businessmen have claimed in the Supreme Court in Sydney that the Sultan, one of the world's richest men, had agreed to buy the Koran as a wedding gift for his third wife ahead of their marriage last year.
The businessmen, who reportedly bought the Koran in Russia from a former colonel in the KGB secret police, said the money was never paid and launched legal action through their company, Garsec, claiming a breach of contract.
Garsec's lawyer Don Grieve said the sultan's private secretary Pehin Nawawi, and his godson, Sunny Chai, were go-betweens in the alleged deal, with Chai acting as Garsec's agent.
Lawyers for Sultan Hassanal Bolkiah, who rules the tiny oil-rich state on the island of Borneo, argued that the case should be dismissed.
"This claim was a joke, and a bad one," Tom Hughes told the court.
But Judge Patricia Bergin said that while Garsec had pleaded its claim in "a hopeless fashion" the case could proceed if the businessmen filed a summons and affidavit evidence.
Outside court, Garsec director Michael McGurk told reporters that the fact the case had not been dismissed "speaks volumes for the fact that we have validity in what we're asserting".
He said that he and his fellow Garsec investors planned to donate 10 percent of the proceeds from the Koran's sale to designated charities, including a local Islamic school.
The case will return to court on November 17. Meanwhile, the tiny Koran remains locked in a Sydney safe.