The achievement is called "You Found Me!" - [Discover and fight Hidden Kombatant 1 in Arcade Ladder (Secret)]
You have to fight Classic Jade to unlock this achievement. To fight her you have to do:
Requirements:
- any round time and difficulty setting
- 2 rounds because you have to do a double flawless on shang tsung
- you can lose rounds (You can lose rounds until you reach Shang Tsung) but you can't lose matches
- at least 3 fatalities (normal fatality or stage fatality) before you reach goro/kintaro
- at least 3 flawless victories before you reach shang tsung
- double flawless on shang tsung without losing a round (Note: You cannot block attacks because of chip damage!)
If you get hit by Shang Tsung do not quit. Beat him until you hear/see "Finish Him!". At this point you can return to player select without penalty.
If a match results in a retry, all Flawless Victories achieved during that match will still count towards your total, including that of the final round. So you can still get all required flawless victories just by beating shang tsung several times.
I used Sheeva's teleport move (down, up). At beginning I used the grab to get some distance to Shang Tsung.
The achievement pops right before you fight Classic Jade. You will get 1000 coins for losing and 5000 for winning (EACH round).