(Updated)

Apex court confirms RM10m fines on AirAsia and MAS to be set aside

Apex court confirms RM10m fines on AirAsia and MAS to be set aside
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PUTRAJAYA (Feb 9) : The Federal Court on Wednesday (Feb 9) rejected an appeal by the Malaysia Competitions Commission (MyCC) to re-impose a RM10 million fine each on AirAsia Bhd and Malaysian Airline System Bhd (MAS), which had been levied in 2014 after the commission found that the two airlines had violated competition laws during their short-lived collaboration in 2012.

A three member bench led by Court of Appeal president Tan Sri Rohana Yusuf unanimously dismissed the appeal by MyCC.

“The bench agreed with the respondents (MAS and AirAsia) that this is not an appropriate case for this apex court to grant leave to meet the requisite (requirements) of Section 96 of the Courts of Judicature Act. Hence, we dismiss both applications for leave,” she said.

Sitting with her were Federal Court judges Justice Datuk Abdul Rahman Sebli and Datuk Mary Lim Thiam Suan.

On April 27, 2021, the Court of Appeal had overturned a High Court decision upholding the decision of MyCC to impose the fines.

Justice Datuk Hanipah Farikullah, who led the appellate bench, had ruled that MyCC should have abided with the Competitions Appeal Tribunal (CAT) decision to lift the fines and not filed a judicial review to challenge the CAT findings.

The appellate court further ruled that MyCC cannot challenge its appellate authority and that the commission is not considered an aggrieved party under Order 53 Rule 2, to initiate a legal challenge against CAT.

It was reported that CAT had allowed MAS and AirAsia’s appeals to lift the fine, while MyCC filed a judicial review at the High Court, where it reversed the CAT decision. The appellate court however, as mentioned, overturned the High Court decision, resulting in this appeal.

Earlier, MyCC counsel Datuk Seri Gopal Sri Ram, who appeared with Datuk Lim Chee Wee and Kwan Will Sen said MyCC as a regulatory body is able to take action and hence, also file a judicial review.

Sri Ram added that the Court of Appeal bench that heard the MAS and AirAsia appeal was wrong as it had considered the formation of the Malaysian Aviation Commission in 2016, and applied it retrospectively after the fine was imposed.

“As MyCC is a regulatory authority, it has the power to sue and also initiate judicial review. It does not comprehend that a regulatory authority cannot review an earlier decision by CAT to remove the fine,” he said.

Lim concurred, saying the questions of law posed to the apex court are novel issues that should be considered and help MyCC as a regulatory authority for future cases.

However, AirAsia counsel Datuk Ambiga Sreenevasan said so far, this is the only case where a regulatory authority has challenged a decision on its own tribunal that already comprises a High Court judge, a former Chief Justice, Bank Negara deputy governor and others.

She added that prior to their collaboration, both airlines had approached MyCC to ensure they had complied with competition law which had been formulated only in 2010, and enforced in 2011.

Hence, she said AirAsia should not be punished when it had consulted with the newly formed regulatory authority in the first place. Ambiga added that MyCC wanted to use the new law to challenge the airline industry.

Logan Sabapathy, who appeared for MAS, argued that in the collaboration, the national carrier did not abandon the four routes to East Malaysia as claimed but maintained them when the collaboration did not work out.

He also argued that it was not proper to impose the fine as MAS had undergone liquidation

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AirAsia and MAS manage to set aside RM10m fines 

Pauline Ng