Malaysia Court of Appeal sets aside RM10 million fine imposed by MyCC on AirAsia and MAS

28 May 2021

On 27 April 2021, the Malaysia Court of Appeal unanimously allowed the appeal by AirAsia Bhd (“AirAsia”) and Malaysian Airline System Berhad (“MAS”) to set aside the financial penalty of RM10 million originally imposed by the Malaysia Competition Commission (“MyCC”) on each of the parties following MyCC’s finding that AirAsia and MAS had entered into a market-sharing agreement.

Briefly, the appeal was made pursuant to MyCC’s decision on 31 March 2014, in which MyCC found that the collaboration agreement entered into between AirAsia and MAS, which purported to allocate the air service transport market between AirAsia and MAS, had breached the Competition Act 2010. MyCC’s decision was overturned by the Competition Appeal Tribunal (“CAT”) and as a result, MyCC proceeded to file a judicial review application with the High Court. In December 2018, the High Court agreed with MyCC’s decision and overturned the CAT’s decisions, effectively reinstating the financial penalties imposed on AirAsia and MAS.

Whilst the full grounds of judgment are still being prepared, it has been reported that the Court of Appeal’s decision, led by Justice Datuk Hanipah Farikullah, was premised upon the following grounds:

• MyCC is bound by the decision of the CAT, as an appellate authority, and accordingly, MyCC cannot challenge decisions made by the CAT. 
• MyCC has no standing (locus standi) to apply for a judicial review of the CAT’s decision, as MyCC was not an aggrieved party under Order 53 rule 2 of the Rules of Court 2012. 
• MyCC had failed to demonstrate that the CAT’s decision to overturn MyCC’s decision was irrational, thus failing to meet the threshold for leave to commence a judicial review proceeding.

As a result of the Court of Appeal’s decision, MyCC was ordered to pay RM30,000 in costs to AirAsia and MAS respectively.