The Malaysia Competition Commission had fined Malaysia Airlines and AirAsia RM10 million each for breaching a market-sharing prohibition.

PUTRAJAYA: Malaysia Airlines (MAS) and AirAsia have won their appeals to quash a RM10 million fine imposed against each of them for breaching a market-sharing prohibition.

Court of Appeal judge Hanipah Farikullah today said the court unanimously allowed the airline companies’ appeals, filed separately but heard together.

The other judges who sat with Hanipah were Lee Swee Seng and Mohd Sofian Abd Razak.

In the court’s decision, Hanipah said the collaboration agreement between MAS and AirAsia was entered on Aug 9, 2011, several months before the Competition Act came into force.

The RM10 million fines by the Malaysia Competition Commission (MyCC) were based on flights by both AirAsia and MAB 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.

“The collaboration agreement was discussed before the Act came into force,” Hanipa said, adding that it was “perfectly lawful” to discuss such agreement at the material time.

She also said the court agreed with the preliminary objection by the two airlines against MyCC.

The airliners contended in their submissions that the commission had no legal standing to file the judicial review against the decision by the appellate tribunal (Competition Appeal Tribunal or CAT) in setting aside the decision to impose the RM10 million fine.

“After the commission issued the order (to impose the RM10 million fine), they had become functus officio (an officer or agency whose mandate has expired).

“They cannot challenge CAT’s decision unless the Act allows them to do so,” she said.

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The court also awarded costs totalling RM60,000 to MAS and AirAsia.

MAS and AirAsia were represented by counsel Logan Sabapathy and Ambiga Sreenevasan, respectively, while Lim Chee Wee appeared for MyCC.

In 2014, MyCC had found both airline companies had breached the market-sharing prohibition under Section 4(2)(b) of the Competition Act by entering into an agreement on sharing markets in the air transport services sector within Malaysia.

MyCC said it had the power to fine both airlines 10% of their global revenue for infringing the Act, but imposed a “far lesser” penalty because the airlines were “cooperative” during the investigation.



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