Earlier this year, the AFR published a series of articles about ASX-listed Horizon Oil's dealings in PNG in 2011, which named Duma, in his role as former petroleum minister, The Guardian newspaper reported.
Duma strenuously denied any suggestion of impropriety and is suing Fairfax Media, now owned by Nine Entertainment, in the federal court, saying the newspaper defamed him by implying he was corrupt, according to court documents.
A spokesman for the Australian Financial Review said he was unable to comment on the case because the matter was before the courts.
In a statement, Duma's lawyers, Mark O'Brien Legal, said the allegations made in the AFR were false and did not constitute good public interest journalism.
The case comes as Australia's attorneys general work together on major changes to the nation's uniform defamation laws.
A key aim of the reforms is to better protect public interest journalism, The Guardian reported.