ACCC Hounds Garuda Indonesia

The Australian Competition and Consumer Commission is pursuing Indonesian airline Garuda over claims that the airline fixed its air freight price. The pursuit follows the High Court’s decision to dismiss Garuda’s claim of sovereign immunity.

According to documents, Garuda Indonesia invoked sovereign immunity because the Indonesian government owns the airline carrier. The High Court, however, decided that it does not have immunity because Garuda is involved in a commercial transaction.

The High Court added that the law provides exception on sovereign immunity when it involves commercial transactions.

ACCC chairman Rod Sims said he welcomes the High Court’s decision because it paves the way for ACCC to pursue the allegations over Garuda on its alleged cartel conduct.

The legal action on Garuda Indonesia began in 2009 when the airline allegedly entered into an agreement with its rivals to fix fuel prices and surcharges for five years from 2001 to 2006. Garuda, however, denied the allegations.

The consumer watchdog, meanwhile, sought for penalties on pecuniary, declaration and injunction against Garuda Indonesia.