Wei Jiet was part of the legal team representing AirAsia Berhad (“AirAsia”) in one of the first appellate decisions on competition law in Malaysia.
In 2014, the Competition Commission (“Commission”) found that AirAsia and Malaysian Airline System Berhad (“MAS”) had infringed Section 4(2)(b) of the Competition Act 2010 (“Act”) because they had entered into a Collaboration Agreement dated 9.8.2011 which allegedly had an object to share market. It proceeded to fine both airlines RM10million each.
In 2016, the Competition Appeal Tribunal (“CAT”) reversed the Commission’s decision.
However, in 2018, the KL High Court reversed the CAT’s findings and reinstated the Commission’s decision.
Both airlines appealed to the Court of Appeal. In 2021, the Court of Appeal allowed AirAsia & MAS’s appeal (Malaysian Airline System Bhd v Competition Commission and another appeal [2021] MLJU 2089). The Court of Appeal’s findings and their significance to competition & administrative law in Malaysia are summarized as follows:
(i) The Commission has no locus standi to commence judicial review proceedings against its own appellate tribunal, the CAT. This was because the Commission is a quasi-judicial body which should be impartial and disinterested in its decision.
(ii) The Commission has no locus standi to commence judicial review proceedings because the Malaysian Aviation Commission Act 2016 had came into force then, and MAVCOM had taken over jurisdiction on competition matters in respect of the civil aviation industry.
(iii) Agreements which purportedly have an object to share market, which were entered before the Act came into force on 1.1.2012, do not infringe the Act. Otherwise, this would be akin to applying the Act retrospectively. This is an important guide to all businesses which have entered into any form of collaboration agreement with competitors before 1.1.2012.
(iv) Agreements which are expressly conditional upon or subject to antitrust clearance and/or exemption from the Commission do not infringe the Act. Otherwise, it would discourage businesses from being transparent and collaborative with the Commission. This is a crucial decision for businesses as they can be assured that they won’t be penalized by merely entering into a conditional agreement with a competitor.
(v) Before invoking the deeming provision under Section 4(2)(b) of the Act and finding that an agreement with an object to share market is anti-competitive, it is necessary for the Commission to first ascertain what the relevant market is. The Commission had failed to do so, and this was fatal. This is important as it necessitates the Commission to identify the exact market which is alleged to be shared in agreements alleged to have an object to share market
(vi) In any event, MAS & AirAsia’s Collaboration Agreement has a net economic benefit to consumers, and thus qualifies for an exemption from liability under Section 5 of the Act.
In February 2022, the Federal Court dismissed the Commission’s application for leave to appeal, therefore upholding the Court of Appeal’s findings.
AirAsia was represented by Dato’ Ambiga Sreenevasan, Tay Beng Chai, Janini Rajeswaran, Wong Weng Yew, Nicole Leong, Lim Wei Jiet & Heng Jia.