In the lawsuit, which was transferred to the Federal Court last week, John Joseph Carter claims insurer Chubb should pay for his legal costs, and breached the terms of a directors and officer liability policy by refusing to hand over the funds.
The criminal case was brought over allegedly corrupt payments made by ORIX, a Japanese fleet management company, to Coca-Cola Amatil in exchange for fleet leasing contracts.
The charges were dropped in September 2019 against Mr Carter and ORIX executive George Georgiou.
In his lawsuit, Mr Carter argues that because the criminal case was discontinued, there was no proof he engaged in any fraudulent act which allowed Chubb to terminate the policy.
In its defence, which was filed in the NSW Supreme Court prior to the transfer, Chubb argues insurance coverage could be refused due to fraudulent omissions that Mr Carter made relating to Orix's dealings with Coca Cola.
"(Mr Carter) as a person who engaged in, and was aware of, the fraudulent misrepresentation and non-disclosure is not entitled to any indemnity under the policy," Chubb wrote.
The insurer has also countersued seeking to reclaim $657,000 advanced to Mr Carter during the criminal proceedings which it claims the former CEO was not entitled to.
ORIX, in its defence, also denies Mr Carter is eligible to be covered under the policy.
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