Federal Court dismisses MyCC’s appeal against AirAsia and Malaysian Airline System

20 April 2022

On 9 February 2022, the Federal Court unanimously dismissed MyCC’s application for leave to appeal to the Federal Court, following the Court of Appeal’s decision on 27 April 2021 to overturn fines against AirAsia Berhad (“AirAsia”) and Malaysia Airlines System Berhad (“MAS”) for an alleged section 4 infringement of the Competition Act 2010 (“Act”).

This case stems from MyCC’s decision in 2014, in which MyCC found that the collaboration agreement entered into between AirAsia and MAS (“Collaboration Agreement”) had infringed the Act, as MyCC alleged that it allocated the air service transport market among AirAsia and MAS. MyCC’s decision was later overturned by the Competition Appeal Tribunal (“CAT”), which led to the MyCC filing a judicial review application at the High Court. In December 2018, the High Court agreed with MyCC’s original decision and overturned the CAT’s decisions, effectively reinstating the financial penalties imposed on AirAsia and MAS. AirAsia and MAS then successfully filed an appeal to the Court of Appeal to uphold the CAT’s decision, which led to MyCC filing for leave to appeal to the Federal Court.

The Federal Court’s decision was premised on the following grounds:

  • MyCC is a quasi-judicial body and it was not proper for MyCC to challenge a decision made by the CAT, which is its appellate authority. As such, MyCC was not “a person who is adversely affected by the decision” within the meaning of Order 53 of Rules of Court 2012. MyCC was not entitled to file an application for judicial review against a decision of the CAT. To find otherwise, quasi-judicial bodies, such as MyCC, would be at risk of abandoning the core principle of fair adjudication;
  • The purported infringement occurred prior to the Act coming into force on 1 January 2012. The Act does not have a provision which expressly states that it has retrospective effect;
  • MyCC failed to identify the relevant market before invoking the deeming provision under section 4(2)(b) of the Act;
  • The matter is fact specific and, in this case, the Collaboration Agreement was at all material times a conditional agreement, whereby its implementation was subject to the approval of MyCC. Further, assuming that the Collaboration Agreement had infringed section 4 of the Act, the conditional arrangement would be exempted from liability under section 5 of the Act as it yielded a net economic benefit to consumers; and
  • MyCC had lost its locus standi to file a judicial review application to the High Court following the coming into force of the Malaysian Aviation Commission Act 2015 (“MAVCOM Act”) on 1 March 2016, as Schedule 1 of the Act specifically excludes MyCC from regulating matters regulated under the MAVCOM Act (i.e. regulation of economic and commercial matters relating to the civil aviation industry in Malaysia, including issues relating to competition).

With the dismissal of MyCC’s application for leave to appeal to the Federal Court, the RM10 million fine against AirAsia and MAS imposed by MyCC were overturned, and that the Court of Appeal’s decision to overturn the High Court’s decision and uphold the findings by the CAT stands.

The full judgment has yet to be made public.