A three-member bench chaired by Justice Azizah Nawawi said there was merit in the appeal and that a previous High Court ruling would be set aside.
“The counterclaim is also in response to 1MDB’s statement of claim on the issue of terms of employment,” said Azizah, who sat with Justices Lim Chong Fong and Choo Kah Sing.
On Feb 7, judicial commissioner Raja Ahmad Mohzanuddin Shah Raja Mohzan dismissed Arul’s application to amend his defence and file the counterclaim over the termination of his contract extension.
The amendment to his defence was over the losses 1MDB suffered in its investment in 1MDB-PetroSaudi Ltd and its dealings with International Petroleum Investment Company (IPIC).
Arul filed the counterclaim against the lawsuit filed by 1MDB in the Kuala Lumpur High Court on Nov 17 last year through Messrs Sanjay Mohan.
He sought from the company RM202,600 for loss of income, a bonus of RM2.5 million, and special damages of RM54 million (loss of income from June 2019 to 2036) in addition to general, exemplary and aggravated damages.
Arul said his employment contract had ended on Dec 31, 2017, but that after discussions, the 1MDB board agreed to extend his contract. He said a new agreement was signed on Feb 23, 2018.
He claimed that according to the extended employment agreement, 1MDB agreed to pay him a monthly salary of RM101,300 until June 30, 2018, and an ex-gratia bonus of RM2.5 million, in addition to his salary for January to April 2018 amounting to RM405,200.
However, he claimed that then finance minister Lim Guan Eng had made various allegations against him, including that the former 1MDB CEO was dishonest and untrustworthy, in an article published by a news portal on May 24, 2018.
Arul claimed that on June 25, 2018, 1MDB wrongfully terminated his contract, concluding that he had acted against the company’s interest without any basis or investigation.
He also alleged that his contract was terminated without any evidence of wrongdoing to prevent the company from making salary payments for May and June 2018 amounting to RM202,600 and the remaining ex-gratia bonus of RM2.5 million.
In May 2021, 1MDB filed the suit against Arul and Irwan Serigar Abdullah for allegedly causing the company losses of US$1.83 billion in relation to its investment in 1MDB-PetroSaudi Ltd, which was converted into an investment in Brazen Sky Ltd, said to be found in the Bridge Global Fund.
1MDB also claimed that the duo misappropriated US$3.5 billion in 1MDB funds paid to Aabar Investments, and US$1.265 billion paid to IPIC on May 9, 2017.
It alleged that Irwan also conspired with Arul to cause the company to implement an employment extension agreement, and make a payment of RM2,905,200 to Arul in accordance with the agreement, in disregard of the company’s interests, causing it to suffer loss and damage.
Lawyer Sanjay Mohan appeared for Arul while Brendan Navin Siva represented 1MDB.