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According to the Wall Street Journal, all the individuals named in the proceedings were involved in promoting the conspiracy, or they were allegedly in a position to stop the misdeed, but refrained from doing so.

THE CORRIDORS OF POWER

Jerrel Yun, Singapore
http://marketing-interactive.com/

A New Zealand's competition watchdog is suing 13 airlines and seven airline staff in the High Court of Auckland for extensive and long-term cartel activity in the air cargo industry.

The Commerce Commission alleges that Air New Zealand, British Airways, Cargolux International Airlines, Cathay Pacific, Emirates, PT Garuda Indonesia, Japan Airlines, Korean Airlines, Malaysian Airlines, Qantas, Singapore Airlines and Singapore Airlines Cargo, Thai Airways and United Airlines colluded to raise cargo prices in and out of New Zealand via fuel surcharge over a period of more than seven years, affecting the price of cargo both into and out of New Zealand.

The Commission says the airlines entered into an illegal global agreement in 1999/2000 under the auspices of the International Air Transport Association (IATA) and imposed the fuel surcharges between 2000 and 2006.

The allegations also involve a series of regional price fixing agreements.

According to the Wall Street Journal, all the individuals named in the proceedings were involved in promoting the conspiracy, or they were allegedly in a position to stop the misdeed, but refrained from doing so.

Paula Rebstock, chair of the Commerce Commission said, "Anti-cartel enforcement activity is a priority for the Commission [and] participation in cartel activity is internationally regarded as one of the most egregious forms of anti-competitive behaviour."

Air New Zealand said it would vigorously defend the case.

In a statement, John Blair, lawyer for Air New Zealand said, "This is clearly an approach designed to justify their existence and seems more about grandstanding than about getting to the bottom of the allegations.

A spokesperson for Emirates said, "Emirates denies the allegations and will be defending the proceedings," adding that the Dubai based airline would not comment further as the matter was before the court.

Cathay Pacific, Singapore Airlines and SIA cargo also said they will be defending the charges while Korean Airlines said that it supports free trade and fair competition practices.

Some airlines are co-operating with the Commission, and an early resolution may be possible. Rebstock said she was confident of success as one airline, in exchange for immunity, would give evidence for the commission while two of the 13, British Airways and Qantas Airways have agreed to fully cooperate in exchange for halving penalties.

AND IN ANOTHER SCANDAL 

Tribunal orders MAS to pay
2 June 2009

KUALA LUMPUR: Malaysia Airlines (MAS) said yesterday a European arbitration tribunal has ordered it to pay Advanced Cargo Logistic GmbH (ACL) 6.9 million euros for breach of a cargo-handling contract.

In 2004, ACL had sought to claim 62.7 million euros from MAS after the Malaysian firm breached an agreement to maintain its European cargo hub at Germany’s Frankfurt-Hahn airport for 10 years from 1999.

“Due to prudent provisioning in previous years, and given that the award orders MAS to pay only about 10% of the sum originally claimed by ACL in 2004, the award is not expected to have a material adverse impact on the financial position of MAS,” it said in a statement.

The airline said it is seeking advice to challenge the ruling.

MAS shares closed up 5.8% at RM3.28. – Reuters

Malaysian Airlines loses cargo case
8 June 2009

An ICC tribunal has ruled in favour of a German cargo company but declined to grant it more than a tenth of its original damages request.

Seated in Geneva, a tribunal comprising Gabrielle Kaufmann-Kohler (Chair), Bernhard Meyer and Paolo Michele Patocchi ordered Malaysian Airlines to pay German cargo company Advanced Cargo Logistic GmbH €7 million, far less than reports suggest the German company wanted. Malaysian reports say it requested €62.6 million.

In 2004, the company accused the airline of breaching a contract to keep a cargo hub at Frankfurt-Hahn airport for ten years. For its part, Malaysian Airlines contended that it was suffering substantial losses operating at Frankfurt-Hahn and cancelled the contract early.

The tribunal issued a partial award in 2007, declaring that Malaysian Airlines had breached its obligations to maintain its European cargo hub at Frankfurt-Hahn. The latest decision concerns damages.

Malaysian Airlines says that given the size of the award, the ruling is not expected to have a "material adverse impact". However, the airline says it may file for annulment.

In the meantime, the airline is taking action against individuals who may be responsible for it incurring losses. According to a Kuala Lumpur Stock Exchange filing, Malaysian Airlines has filed an action in Malaysia against "former officers" of Advanced Cargo Logistic for "an indemnity against the amount of the award," as well as for other "losses incurred in connection with its operation at the Frankfurt-Hahn airport."

Counsel to Advanced Cargo Logistics, Thomas Legler of Python & Peter, says the cargo company can see "no basis for Malaysian Airlines to ask to set aside the award."

"The award was scrutinised by the ICC Court. In addition the chances of successfully having it set aside by the Swiss Federal Tribunal are statistically very slim," he says. In regards to the action against former Advanced Cargo Logistic officials in Malaysia, Legler says as the company is not involved, it "cannot take any position regarding these claims."

In 1999 the companies entered into a contract providing for Malaysian Airlines to relocate its cargo operations from Schiphol Airport in Amsterdam and Frankfurt International Airport to Frankfurt-Hahn airport, a smaller airport situated 175km from Frankfurt city.

After two years operating at Frankfurt-Hahn, Malaysian Airlines cancelled the contract. According to the company's website, it still operates cargo hubs at Schiphol and Frankfurt International.

Malaysian Airlines is engaged in another ICC arbitration with Air Maldives. The two airlines are battling over a contract that was dissolved after Malaysian Airlines was sold back to the government. - USBS

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Arbitral Tribunal

·       Gabrielle Kaufmann-Kohler (chair), (Switzerland)
·       Bernhard Meyer (Switzerland)
·       Paolo Michele Patocchi (Switzerland)

Counsel to Advanced Cargo Logistic (ACL)
·       Python & Peter
Partner Thomas Legler in Geneva and Counsel Christoph Brunner in Bern
·       Till Müller-Heidelberg in Bingen

Counsel to Malaysian Airlines (MAS)
·       Lee Hishammuddin Allen & Gledhill
Partners Rosli Dahlan, DP Naban and Nitin Nadkarni in Kuala Lumpur
·       Homburger
Partner Markus Wirth and associates Nicolas Herzog and Melissa Magliana in Zurich

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