Now Everyone Cannot Owe PSC!

In December 2018 Malaysia Airport (Sepang) Sdn Bhd (Malaysia Airport) had filed three law suits against AirAsia X Bhd (AAX) for the recovery of cumulative unpaid Passenger Service Charge (PSC), which was previously known as Airport Tax, amounting to RM40,728,327.50 and unpaid late payment charges RM792,381.00.

In November 2017, Malaysian Aviation Commission (Mavcom) announced the final step for the full equalisation of PSC across all local airports in Malaysia effective from January 1, 2018. This was to equalise the PSC for non-Asean international flights at KLIA-2 to be the same with those at KLIA and other airports in Malaysia from RM50 to the regulated RM73 PSC. During this period  Tony Fernandes voiced out his dissatisfaction over Mavcom’s roles, noting that the commission’s airport tax was charged “unfairly” and other complaints about Malaysia Airport and MAVCOM, HERE.

The case numbers for the said three law suits are:

KL High Court Writ Summon No: WA-22NCVC-816-12/2018, WA-22NCVC-817-12/2018 and WA-22NCVC-58-12/2018.

On 18 July 2019 the Learned High Court Judge, YA Datuk Azimah Binti Omar, had adjudged that AAX to pay Malaysia Airport the unpaid cumulative PSC sum of RM40,728,327.50 and unpaid late payment interest of RM702,381.00.  In September 2019, it was reported that AAX applied for a stay of execution of the said Judgement and it was dismissed by the court.  

Recently the Learned Judge has delivered her 74 page Grounds of Judgment against AAX.  It is not unusual for Judges to deliver their Grounds of Judgement a few months after they they had given their judgment in a case. The reason being that the Judges have to handle many cases especially in the big towns like KL. More importantly the Learned Judges have to consider the written submissions of the parties, sieve through all the evidence led during the hearing/trial (Notes of Evidence can be thousand of pages) and apply the law to the evidence. It is not an easy exercise to write the Grounds of Judgment, which will be subsequently published in the law reports to be read by students, lawyers, academics and others.

It is a damning judgment for AAX!

Below is the summary of the said Judgment:

1. The power to determine the regulated PSC rate lies solely with the Malaysian Aviation Commission (MAVCOM). See: para 42 of the Judgement.
2.  Malaysia Airport is enforcing the PSC set by MAVCOM. See: para 47 of the Judgement.
3. PSC is a Fixed Rate and not a ceiling rate to be negotiated upon. If AAX was unhappy with the PSC rate, it should have taken it up with MAVCOM and not vex Malaysia Airport. The contention that the PSC Rate was a ceiling rate was clearly an afterthought. See: para 48 & 66 of the Judgement.
4. AAX was bending the law to suit its narratives. “This Court cannot stand with the Defendant’s attempt to bend the law to suit its narrative” (in verbatim). See: para 48 of the Judgement.
5. It was a backdoor attempt on Judicial Review against MAVCOM’s statutory decisions in determining the PSC Rates by AAX, and the “court will not be manipulated as an instrument to assist AAX indolence”. See: para 52 of the Judgement.
6. While AAX had accepted the Regulations and/or Conditions of Use for Kuala Lumpur International Airport Malaysia (COU) 2017, AAX “ought not to be allowed to willy-nilly shift the goal post as and when it suits its fancy and narrative.” “No man can be allowed to go back on his own words and admissions.” (In verbatim.) See: para 87 of the Judgement.
7. PSC can not be set off by other claims. See: para 91 – 93 of the Judgement.
8. AAX had also agreed that Malaysia Airport shall not be liable for any loss and damage due to planned or unplanned closure of KLIA and KLIA2 or suspension of the airport by Malaysia Airport.  See: para 96 of the Judgement.
9. AAX is barred from claiming losses or damages from Malaysia Airport.  See: para 96 of the Judgement.

Below are the important excerpts of the said 74 page Grounds of Judgement.