PUTRAJAYA: The Court of Appeal here has partly allowed former 1Malaysia Development Bhd (1MDB) president and chief executive officer Arul Kanda Kandasamy's appeal to amend his statement of defence to include his counter-claim to seek outstanding salary and bonuses from 1MDB, in response to the company's lawsuit against him.
The Court of Appeal's three-judge panel led by Datuk Azizah Nawawi allowed Arul Kanda's appeal to amend his statement of defence to add the counter-claim, which is confined to his employment contract claim for outstanding salary and bonuses from 1MDB.
"We find merits in the appeal," said Azizah, who delivered the court's unanimous decision.
She said the counter-claim was made in response to the respondent's (1MDB) statement of claim on the issue of termination of employment.
Presiding alongside Azizah were Datuk Lim Chong Fong and Datuk Dr Choo Kah Sing.
Earlier in the appeal hearing, Arul Kanda's lawyer Sanjay Mohan told the court that his client is not pursuing the appeal with regard to his (Arul Kanda's) claim for abuse of process but is limiting the appeal to the proposed amendments related to the claim for outstanding salary and bonuses.
The counter-claim contains two separate and distinct claims: one for the recovery of outstanding salary and bonuses due to Arul Kanda, and the other for abuse of process.
In February this year, the High Court dismissed Arul Kanda's application to amend his statement of defence to include the counter-claim for both issues.
Arul Kanda, who was acquitted by the criminal High Court in the 1MDB audit tampering case in March last year, is seeking, through his counter-claim, a sum of RM202,600 for loss of income, a bonus of RM2.5 million, and special damages of RM54 million (for loss of income from June 2019 to 2036) as well as general, exemplary, and aggravated damages.
In his counter-claim, he said on June 25, 2018, 1MDB wrongfully terminated his contract without any basis or investigation to conclude that he had acted against the company's interests.
In May 2021, 1MDB filed a lawsuit against Arul Kanda and former 1MDB chairman Tan Sri Mohd Irwan Serigar Abdullah for alleged breach of trust and conspiracy, causing 1MDB to incur losses of US$1.83 billion in connection with its investment in 1MDB-Petrosaudi Ltd, which was converted into an investment in Brazen Sky Limited, purportedly held in the Bridge Global Fund.
1MDB claimed that Arul Kanda and Mohd Irwan committed breach of trust and conspiracy by misappropriating 1MDB funds amounting to US$3.5 billion paid to Aabar Investments and US$1.265 billion paid to the International Petroleum Investment Company (IPIC) on May 9, 2017.
According to 1MDB, Irwan also conspired with Arul Kanda to cause the company to enter into the Employment Extension Agreement and make payments totalling RM2,905,200 to Arul Kanda under the agreement, disregarding 1MDB's interests and resulting in losses to the company.
On Aug 23 last year, the High Court in Kuala Lumpur dismissed the bid by Arul Kanda and Mohd Irwan Serigar to strike out the US$6.59 billion lawsuit filed by 1MDB against them.
Lawyers Brendan Navin Siva and Aida Haryani Salamon represented 1MDB. Representing Arul Kanda were lawyers Adam Lee and Hing Hong Jer.