High Court reinstates RM10m fine imposed on MAB, AirAsia


The High Court in Kuala Lumpur (KL) yesterday reinstated the decision of the Malaysia Competition Commission (MyCC) which imposed a fine of RM10 million each on the country’s two major carriers, Malaysia Airlines Bhd (MAB) and AirAsia Bhd, for breach of market-sharing prohibition under the Competition Act 2010.

Judge Datuk Nordin Hassan held that the decision by the Competition Appeal Tribunal (CAT) in allowing the appeal by MAS and AirAsia to set aside the fines imposed by MyCC was tainted with error of law and unreasonableness.

“In the circumstances, the first respondent’s decision (CAT) is set aside and the decision of the applicant (MyCC) is reinstated,” he said and ordered the two air carriers to pay RM10,000 in costs each to the applicant, MyCC.

Nordin also held that the tribunal had failed to consider that the collaboration agreement entered between the two air carriers over sharing markets in the air transport services sector had the effect of distorting competition.

He also said the applicant had locus standi to initiate the review application as the action filed by MyCC was before the establishment of the Malaysian Aviation Commission and as such, the applicant’s right to commence the judicial was not affected.

Earlier, counsel Datuk Lim Chee Wee, representing MyCC, requested MAB and AirAsia to pay the RM10 million fine within seven days to which Nordin said, it was too short a time and asked both parties to submit on the matter.

The court then did not give any time frame for both MAB and AirAsia to pay the fine.

Outside the court, counsel Leonard Yeoh who acted for AirAsia told reporters that the company was unhappy with yesterday’s ruling and would file an appeal at the Court of Appeal.

MyCC filed the judicial review application naming CAT as the first respondent, while MAB and AirAsia were named as the second and third respondents.

MAB and AirAsia had appealed against the MyCC’s decision on April 11, 2014, which found that both airlines were in breach of the market-sharing prohibition under Section 4(2)(b) of the Act by entering into an agreement which saw the two airlines sharing markets in the air transport services sector within Malaysia.

MyCC has the power to fine both airlines 10% of their global revenue for infringing the Act, but levied a far lesser penalty because the airlines were cooperative during the investigation.

The RM10 million fine by MyCC was based on flights mounted by both MAB and AirAsia in the four months between Jan 1 and April 30, 2012, on routes encompassing KL-Kota Kinabalu, KL-Kuching, KL-Sandakan and KL-Sibu. — Bernama