PUTRAJAYA (March 3): The Court of Appeal (COA) has dismissed three striking out appeals by AirAsia Bhd and AirAsia X Bhd (AAX) against the original suit filed by Malaysia Airports (Sepang) Sdn Bhd (MASSB), a unit of Malaysia Airports Holdings Bhd (MAHB), relating to outstanding passenger service charges (PSCs).

The three-member bench led by Justice Datuk Has Zanah Mehat and comprising Justices Datuk Hajjah Azizah Haji Nawawi and Datuk See Mee Chun also found that the High Court did not err in granting MASSB a summary judgment for a total of RM41.55 million against AirAsia and AAX, comprising the outstanding PSCs, late payment charges and costs.

As such, the bench dismissed AirAsia and AAX’s three summary judgment appeals before the court on Thursday (March 3).

“We find no merit in AirAsia’s appeals against the decision of the High Court in granting a summary judgment,” Justice Has Zanah said in the bench's decision via Zoom proceedings.

In dismissing the appeals, she ordered AirAsia to pay costs of RM10,000 for each appeal, totalling RM60,000.

MASSB's claim against AirAsia and AAX is for unpaid PSCs at the rate set by the Malaysian Aviation Commission (Mavcom) — as stated in the Mavcom (Aviation Services Charges) Regulations 2016, which were amended in 2017 and 2018 to the present ASC regulations.

This is also in view of the contract entered into by the plaintiff and defendants — the conditions for use for Kuala Lumpur International Airport Malaysia (COU 2010), which were revised in 2017 (COU 2017).

AirAsia and AAX denied having accepted the terms of COU 2010 and COU 2017 and denied being bound by the two contracts. The airlines said they had raised their objections to the plaintiff but were not entertained.

AirAsia’s sole contention is that MASSB or MAHB had represented to the defendants that the PSC rate stated in the present ASC regulations was a ceiling rate, instead of a fixed rate, and that the amount payable was to be negotiated between the parties.

In the Court of Appeal judgment, it is stated that AirAsia’s dispute is not with MASSB or MAHB but with the commission as it had prescribed the applicable PSC rate.

“We are of the opinion and we agree with the findings of the learned High Court judge that AirAsia’s actual dispute is not a dispute between two aviation service providers, but between AirAsia and the commission itself, because it is the commission that had prescribed the applicable PSC rate, and MAHB and MASSB collects the same. Specifically, AirAsia’s actual dispute is against the decision of the commission to equalise the PSC rates between KLIA and klia2,” Justice Has Zanah said in her judgment.

“Accordingly, AirAsia ought to have addressed its PSC dispute by judicial review against the commission’s statutory decision to increase the rate,” she added.

MASSB was represented by Skrine head of dispute resolution Ivan Loo, along with counsels Shannon Rajan, Eric Gabriel Gomez and Laarnia Rajandran.

Meanwhile, AirAsia was represented by Steven Thiru.

Justice Has Zanah also said that it is “crystal clear” that the current PSC is set at RM67, and there is nothing to suggest or imply that the rate is a ceiling rate as claimed by AirAsia.

She also said that the setting of the charge by the commission is not “ultra vires” as claimed by AirAsia as the regulation of PSCs is under Mavcom's purview.

Ultra vires is a Latin phrase used in law to describe an act which requires legal authority but is done without it.