High Court grants Summary Judgment exceeding RM 40 million in favour of Malaysia Airports Sepang against AirAsia

On 18 July 2019, the Kuala Lumpur High Court granted summary judgment for all three civil suits brought by Malaysia Airports (Sepang) Sdn Bhd (“MA Sepang”) against AirAsia Berhad and AirAsia X Berhad (collectively “AirAsia”).
MA Sepang had initiated the civil suits due to AirAsia’s failure to collect from its passengers and pay to MA Sepang the newly revised Passenger Service Charge (“PSC”) rate of RM 73 for long-haul international flights from klia2, which had been prescribed and gazetted by the Malaysian Aviation Commission (“MAVCOM”). Instead, AirAsia had continued to collect from its passengers and pay to MA Sepang the former rate of RM50, on the basis that the revised charge was merely a ceiling rate.
In granting MA Sepang’s summary judgment applications, the High Court ordered AirAsia inter alia to pay MA Sepang a combined amount exceeding RM40 million in unpaid PSC and further issued a declaration that AirAsia is to pay MA Sepang the PSC rates that have been prescribed by law.
AirAsia had filed applications to strike out the civil suits by MA Sepang on the basis that only MAVCOM and not the courts should determine any disputes between aviation service providers. However, in coming to its summary judgment decision, the High Court ruled that it had the jurisdiction to decide these matters and consequently dismissed AirAsia’s striking out applications.
MA Sepang was represented by our Dato’ Lim Chee Wee, Shannon Rajan and Eric Gabriel Gomez.
It has been reported in the local media that AirAsia will appeal the decisions.