Malaysia Update: Competition Case Update on the Federal Court Decision in MAS/AirAsia v MyCC

Last November, we wrote an update on some of the important principles laid down by the Court of Appeal in its written judgment in favor of airlines, AirAsia and MAS. Following the decision of the Court of Appeal, Malaysia Competition Commission (“MyCC”) subsequently filed an application for leave to appeal to the Federal Court. 

Today, the Federal Court (“Court”), presided by the Right Honorable Dato’ Rohana Binti Yusof (President of the Court of Appeal) and hearing together with Justices Dato Mary Lim Thiam Suan and Dato Abdul Rahman Bin Sebli unanimously decided in favour of AirAsia and MAS and dismissed MyCC’s application for leave to appeal.

AirAsia and MAS successfully argued that the questions of law raised by MyCC do not satisfy the requirements for leave to appeal to the Federal Court on the following grounds:

• The law is clear that MyCC is a quasi-judicial body who decides in an impartial fashion and thus has no personal interest in the confirmation or reversal of its decision. If its decision is reversed, a quasi-judicial body cannot be ‘adversely affected’. Thus, MyCC is not entitled to file an application for judicial review against decision of the Competition Appeal Tribunal. Otherwise, quasi-judicial bodies will be at risk of abandoning the core principle of fair adjudication;

• The purported infringement took place in late 2011 prior to the Competition Act 2010 (“Act”) coming into force on 1.1.2012. The Act does not have a provision which expressly states that it has retrospective effect;

• MyCC took conflicting positions regarding definition of market. It initially took the position that it was not required to define the relevant market in a finding of market sharing, yet conceded before the Court of Appeal that it was necessary to define the relevant market and proceeded to submit that the Commission had in fact defined the relevant market;

• MyCC failed to identify the relevant market before invoking the deeming provision under Section 4(2)(b) of the Act. It further failed to consider that AirAsia and MAS continued to compete on the 4 routes averred to be shared between parties;

• The matter is fact specific: in this case, the collaboration agreement between MAS and AirAsia was entirely conditional upon anti-trust compliance. The Court of Appeal also finding of fact that, even assuming that the Collaboration Agreement had infringed Section 4, it would be exempt from liability under Section 5 as it yielded a net economic benefit to consumers;

• When MAVCOM took over jurisdiction from the Commission in relation to regulation of competition matters within the civil aviation industry in 1.3.2016, MyCC no longer has jurisdiction to file a judicial review application to the High Court. The facts of this case are peculiar and a decision by the Court on the questions posed by MyCC would not benefit the general public since future cases would not have the issue of jurisdiction over competition issues concerning the aviation industry.

The Court unanimously decided that MyCC’s application did not meet the threshold for leave to appeal further and dismissed MyCC’s application with costs of RM 30,000 awarded to the airlines respectively.

AirAsia’s team was led by counsel, Dato’ Ambiga Sreenevasan (together with Ms. Janini Rajeswaran and Mr. Lim Wei Jiet) whilst Tay & Partners team comprised Ms. Nicole Leong (Partner), Mr. Wong Weng Yew (Partner) and Ms. Heng Jia (Associate).

MAS was represented by Mr. Logan Sabapathy and Cheah Yi Huan from Messrs. Logan Sabapathy & Co., while Datuk Seri Gopal Sri Ram, Datuk Lim Chee Wee and Mr. Kwan Will Sen of Lim Chee Wee Partnership appeared for MyCC.

By Nicole Leong and  Ms. Heng Jia, Tay & Partners, Malaysia, a Transatlantic Law International Affiliated Firm.

For further information or for any assistance please contact malaysia@transatlanticlaw.com

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