Malaysia Airlines, AirAsia win appeals to quash RM10m fine over market-sharing prohibition breach

A Court of Appeal three-member bench led by Justice Datuk Hanipah Farikullah allowed the appeals by both air carriers to reinstate the decision of the Competition Appeal Tribunal (CAT) which found that they did not infringe Section 4 (2) of the Competition Act 2010. — Reuters pic
A Court of Appeal three-member bench led by Justice Datuk Hanipah Farikullah allowed the appeals by both air carriers to reinstate the decision of the Competition Appeal Tribunal (CAT) which found that they did not infringe Section 4 (2) of the Competition Act 2010. — Reuters pic

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PUTRAJAYA, April 27 ― Malaysia Airlines (MAS) and AirAsia Berhad won their appeals today to quash the RM10 million fine imposed on each of them by the Malaysia Competition Commission (MyCC) for breaching a market-sharing prohibition.

A Court of Appeal three-member bench led by Justice Datuk Hanipah Farikullah allowed the appeals by both air carriers to reinstate the decision of the Competition Appeal Tribunal (CAT) which found that they did not infringe Section 4 (2) of the Competition Act 2010.

Justice Hanipah, who delivered the court's decision, said CAT is an appellate authority and MyCC must abide by its decision.

“It (MyCC) cannot ignore or challenge the decision of the appellate authority unless it is expressly provided by Parliament,” she said.

Justice Hanipah said the court was of the view that MyCC was not a person who is adversely affected by CAT's decision.

She allowed a preliminary objection by MAS and Airasia  that MyCC had no locus standi (legal standing) to file the judicial review against CAT's decision in setting aside its (MyCC) decision to impose the RM10 million fine.

Justice Hanipah, who sat with Justices Datuk Lee Swee Seng and Datuk Indera Mohd Sofian Abd Razak, also ordered MyCC to pay RM30,000 cost each to MAS and Airasia.

The court proceeding was conducted via “Zoom” video-conferencing.

In the court's decision, Justice Hanipah said the collaboration agreement was entered before the Competition Act came into force on Jan 1, 2012 ,adding that it was perfectly lawful to discuss such possible agreement at the material time.

MyCC fined MAS and Airasia RM10 million each in 2014 after finding that both airliners had breached the market sharing prohibition under Section 4 (2) of the Competition Act by entering into an agreement on sharing markets in the air transport services sector within Malaysia.

Both airlines then appealed over the fine and on Feb 18, 2016, CAT set aside MyCC's decision.

MyCC then filed a judicial review application in the High Court seeking for a certiorari order to quash CAT's decision and to reinstate its (MyCC) decision in imposing the fines on MAS and Airasia.

In December 2018, the Kuala Lumpur High Court allowed MyCC's judicial review and reinstated its (MyCC) decision to impose the fine on both airlines prompting MAS and Airasia to appeal to the Court of Appeal.

The RM10 million fine by MyCC was based on flights by both the airlines in the four months between Jan 1 and April 30, 2012 on the Kuala Lumpur-Kota Kinabalu, Kuala Lumpur-Kuching, Kuala Lumpur-Sandakan and Kuala Lumpur-Sibu routes.

Airasia was represented by lawyer Datuk Ambiga Sreenevasan, while lawyers Logan Sabapathy represented MAS and Datuk Lim Chee Wee appeared for MyCC. ― Bernama

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