Directors owe fiduciary duties primarily to the company, not to fellow directors; third-party claims can proceed to determine joint liability in cases of alleged tortious conduct.

JUDGMENT

S Nantha Balan JCA:

Introduction

[1] There are 2 appeals before us, namely, Civil Appeal No W-02(IM)(NCVC)-1572-09/2024 ("Appeal 1572") and Civil Appeal No W-02(IM)(NCVC)-1573-09/2024 ("Appeal 1573"). The Appellant in both appeals is Tan Sri Dr Mohd Irwan Serigar bin Abdullah ("Irwan"). He is the 2nd Defendant in Kuala Lumpur High Court Suit No WA-22NCvC-338-05/2021 ("Suit 338"). The appeals are against the decision of the Learned Judicial Commissioner (as he then was) dated 6 September 2024 in Suit 338. The Plaintiff in Suit 338 is 1Malaysia Development Berhad or more infamously known as "1MDB". The 1st Defendant in Suit 338 is Arul Kanda A/L Kandasamy. We shall refer to the 1st Defendant in Suit 388 as "Arul Kanda" and the Appellant in both appeals as "Irwan". Arul Kanda and Irwan shall be collectively referred to as "the Defendants". The Respondents in Appeal 1572 are Datuk Kamal bin Mohd Ali (Third-Party 1) and Dato' Seri Norazman bin Ayob (Third-Party 2). The Respondent in Appeal 1573 is Azmi bin Tahir (Third-Party 3). For ease of reference we shall refer to the Respondents in both appeals by their abbreviated names, "Kamal", "Norazman" and "Azmi" respectively. Where necessary, Kamal, Norazman and Azmi shall be referred to collectively as "the Third-Parties".

[2] By the said decision dated 6 September 2024 the Learned Judicial Commissioner had allowed the applications by the Third Parties (per Enclosures 236 and 241) and set-aside the Third-Party Notice dated 10 June 2024 (Enclosure 167) and struck out Irwan's Statement of Claim against the Third Parties dated 2 August 2024 (Enclosure 191). The application by Kamal and Norazman is encl 236 whereas the application by Azmi is encl 241.

[3] For completeness, we should mention that there are other Third Parties who succeeded in their applications to set aside the Third-Party Notice and strike out Irwan's Statement of Claim against them. The other Third-Parties are Tan Sri Dato' Seri Lodin bin Wok Kamaruddin (Third-Party 4), Datuk Seri Asri bin Hamidin @ Hamidon (Third-Party 5) and Datuk Johan bin Mahmood @ Johan Mahmood Merican (Third-Party-6). However, Irwan did not lodge any appeal against the Judicial Commissioner's decision vis-à-vis these other said Third Parties. As such, the present appeals are only concerned with the Third-Party proceedings against Kamal, Norazman and Azmi and no reference will be made to Irwan's allegations against these other Third Parties or the Judicial Commissioner's decision vis-à-vis these other Third-Parties.

[4] We should also mention that counsel who appeared before us informed the Court that 1MDB, qua the Plaintiff in Suit 338 did not object and took no position vis-à-vis Irwan's Third Party proceedings against the Third-Parties, and the applications by Kamal, Norazman and Azmi. Thus, the dispute was purely between Irwan and the Third-Parties. As such, 1MDB did not participate in the appeals before us.

Background

[5] 1MDB was incorporated on 27 February 2009 to, inter alia, undertake investments for the purpose of promoting the economic and social growth and development of Malaysia. According to 1MDB, since around 20 July 2016 through the announcement of the filing by United States of America Department of Justice ("DOJ") of its Civil Forfeiture Complaints for recovery of misappropriated 1MDB funds, it has become public knowledge that 1MDB, being Malaysia's wealth fund was in fact a self-enriching stealth fund for fugitive Jho Low, convicted former Prime Minister Dato' Seri Najib Razak, his step son Riza Aziz, convicted Tarek Obaid and Patrick Mahony and other associate fraudsters, who received Malaysia's public funds.

[6] Arul Kanda, was appointed by 1MDB as its Group Executive Director and President, serving from 1 January 2015 to 31 December 2017. On 31 December 2016, Arul Kanda resigned as a director of 1MDB but remained as President. Arul Kanda was primarily responsible for the management of 1MDB at the material time in his capacit