Court upholds RM10mil fine on MAS and AirAsia

KUALA LUMPUR: The High Court here has upheld the decision by the Malaysia Competition Commission (MyCC) which slapped a RM10mil fine on AirAsia Bhd and Malaysia Airlines ( MAS) each for violating anti-competition practices.

High Court (Appellate and Special Powers) judge Justice Nordin Hassan made the decision here yesterday after allowing a judicial review filed by MyCC.

MyCC had filed the judicial review to challenge the decision by Competition Appeal Tribunal (CAT) that set aside MyCCs fine on the two airlines.

It named CAT, MAS and AirAsia as the first, second and third respondents, respectively.

In his decision, Justice Nordin said CATs decision to set aside the fine was tainted with error of law and unreasonableness.

On the issue of locus standi, the judge said the applicant (MyCC) had the locus standi to file the judicial review.

The court then reinstated the fines against the two carriers and ordered for MAS and AirAsia to pay RM10,000 in costs each to MyCC.

The court did not provide a time frame for the two respondents to settle their fines.

When met by reporters, MyCC CEO Iskandar Ismail said the courts decision has cleared all doubt.

On March 31, 2014, MyCC found both airlines guilty of anti-competition practices, under the Competition Act 2010 when they entered into an agreement which saw them sharing markets in the air transport services sector within Malaysia.

The government-led equity tie-up between AirAsia and MAS, inked on Aug 9, 2011, fell through later and was called off by Khazanah Nasional Bhd on May 2, 2012.

However, MyCC proceeded with the anti-competition probe when the 2010 Act came into force on Jan 1, 2012, after the AirAsia-MAS deal was instituted.

MyCCs fine was based on flights by both airlines in the four months between Jan 1 and April 30, 2012, on the KL-Kota Kinabalu, KL-Kuching, KL-Sandakan and KL-Sibu routes.

The RM10mil penalty each on AirAsia and MAS was less than the maximum fine of 10% of the companies respective worldwide turnovers between January and April 2012, when the alleged infringement occurred.

Lawyer Datuk Lim Chee Wee appeared for MyCC. Lawyers S. Logan appeared for MAS and Leonard Yeoh for AirAsia.