March 3, 2024

Fed Court dismisses insurance companies’ bid to intervene in MyCC’ s attempt to reinstate RM10 mil fines on AirAsia, MAS

3 min read

A three-member Federal Court bench on Tuesday (June 27) has unanimously dismissed an application by three insurance companies to intervene in Malaysia Competitions Commission (MyCC) review of another apex court panel’s decision concerning its appeal to reimpose RM10 million fines on AirAsia and Malaysia Airlines Systems Bhd (MAS).

The bench, led by Court of Appeal president Tan Sri Abang Iskandar Abang Hashim, said the insurance companies are not proper parties to intervene in this case.

“There is no doubt [that] they may be affected (later) but we find [that it is] not at this stage,” he said.

Abang Iskandar ordered the three insurance companies — Allianz General Insurance Company (Malaysia) Bhd, AmGeneral Insurance Bhd and RHB Insurance Group — to pay total costs of RM90,000 (ie RM30,000 each) to MyCC.

The other members of the bench were Federal Court judges Datuk Zabariah Mohd Yusof and Datuk Harmindar Singh Dhaliwal.

The three insurance companies, represented by Anand Raj, wanted to intervene in the review proceedings after MyCC filed a judicial review application at the High Court over the Competitions Appeal Tribunal (CAT) having overturned the commission’s decision to fine the insurers RM130.2 million.

In 2020, MyCC had found that an agreement on the application of trade discounts on automotive parts prices and hourly labour rates for motor vehicle repairs done under the PIAM Approved Repairers Scheme (PARS) was a breach of the Competition Act 2010.

Anand Raj had earlier told the panel that if MyCC’s review is allowed, the insurers would be directly affected as they are in a similar situation as the two airlines, because the CAT had allowed the airlines’ appeal, and the commission is challenging the tribunal’s decision.

He also alleged that the MyCC also intends to amend the Competition Act to allow the commission to review CAT’s decision.

MyCC’s counsel Kwan Will Sen said the matter in the High Court had yet to be canvassed, and that the insurers’ bid to intervene are akin to them “being at the wrong airport”.

Despite Tuesday’s decision not to allow the three insurance companies to intervene, Anand Raj applied for them to hold a watching brief to the proceedings, which Abang Iskandar allowed.

However, the proceedings for MyCC’s review against the two airlines did not proceed on Tuesday, as it was already late in the afternoon.

The court has fixed July 18 to hear the review.

Besides Kwan, the MyCC was led by lead counsel Datuk Lim Chee Wee, while Datuk Ambiga Sreenevasan appeared for AirAsia, and Logan Sabapathy for MAS.

MyCC’s review of AirAsia’s and MAS’ appeal

The MyCC is seeking a review of CAT’s decision to lift the fines on AirAsia and MAS, which it had earlier imposed in 2014, after it found that both airlines had breached the market sharing prohibition under Section 4(2) of the Competition Act 2010 by entering into an agreement on sharing markets in the air transport services sector within Malaysia.

The CAT lifted the fines in 2016, following the airlines’ appeal.

After that, the MyCC filed a judicial review application against the CAT’s decision, and in 2018, the High Court reinstated the fines on the two airlines.

However, the Court of Appeal overturned the High Court’s decision and upheld the CAT’s decision in 2021.

The appellate court ruled that the MyCC should have abided with CAT’s decision to lift the fines, and not filed a judicial review to challenge the tribunal’s findings.

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