On 16 August 2024, the Kuala Lumpur High Court granted summary judgment for the full amount of approximately RM17.7 million claimed in a civil suit brought by Malaysia Airports (Sepang) Sdn Bhd (“
MA Sepang”) and Malaysia Airports Sdn Bhd (“
MASB”) (collectively, “
Malaysia Airports”) against MYAirline Sdn Bhd (“
MYAirline”).
MYAirline is a low-cost airline which used to operate at Kuala Lumpur International Airport Terminal 2, which is managed by MA Sepang, as well as eight other airports managed by MASB, namely Sibu Airport, Sultan Ismail Petra Airport, Tawau Airport, Kuching International Airport, Miri Airport, Penang International Airport, Kota Kinabalu International Airport and Langkawi International Airport.
Starting from around March 2023, despite continuing to utilise the services and facilities provided at the aforementioned airports, MYAirline ceased making payment for a plethora of key airport charges, including passenger service charges, landing charges, aircraft parking charges, aerobridge charges and check-in-counter charges.
In October 2023, Malaysia Airports initiated a civil suit against MYAirline for the outstanding airport charges which amounted to approximately RM17.7 million, comprising of RM9.1 million due and owing to MA Sepang and RM8.6 million due and owing to MASB.
Shortly thereafter, MYAirline’s air operator certificate and air service licence were revoked by the nation’s aviation regulators, meaning that MYAirline could no longer carry passengers, mail or cargo for hire or reward.
MYAirline applied to strike out the civil suit on the basis that only the Malaysian Aviation Commission (“
MAVCOM”) and not the courts should determine any disputes between aviation service providers. MYAirline’s argument was premised on Part XI of the Malaysian Aviation Commission Act 2015 which provides that any dispute between providers of aviation services regarding any matter under the Act shall first be resolved through mediation, failing which MAVCOM shall commence to decide on the dispute. The High Court dismissed MYAirline’s striking out application and, in its Broad Grounds of Judgment, held amongst others that the statutory dispute resolution mechanism only involved disputes regarding operational issues at the airports and did not include the power for MAVCOM to order an aviation service provider to pay outstanding debts to another aviation service provider.
The High Court then granted summary judgment to Malaysia Airports for the full amount claimed, finding that MYAirline had failed to raise any triable issues in respect of either liability or quantum. It is noteworthy that, in its Broad Grounds of Judgment, the High Court took judicial notice that prompt payment by airlines provide the lifeblood for the country’s airports to remain in operation.
The High Court’s decision was widely reported in the media.
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Malaysia Airports was represented by Shannon Rajan (Partner) and Eric Gabriel Gomez (Senior Associate) of the Aviation Practice of Skrine, who were assisted by Katelyn Yeoh (Pupil-in-Chambers).