KUALA LUMPUR (May 8): The High Court has on Monday (May 8) adjourned the Malaysia Competitions Commission's (MyCC) judicial review to seek leave (permission) to review the Competition Appeal Tribunal (CAT)'s Sept 2 decision.
MyCC filed the judicial review at the High Court in December last year.
CAT had allowed the appeal by Persatuan Insurans Am Malaysia (Piam) and its 22 members against MyCC’s decision in 2020, deeming an agreement on the application of trade discounts on automotive parts prices and hourly labour rates for motor vehicle repairs done under the PIAM Approved Repairers Scheme (PARS) as a breach of the Competition Act 2010.
In its application, MyCC seeks to quash CAT’s decision and reinstate MyCC’s original decision made three years ago.
On Monday, High Court judge Datuk Ahmad Kamal Md Shahid adjourned the matter for case management on May 16, to enable the parties to file more affidavits.
Ahmad Kamal directed that the respondents, consisting of Piam and the 22 insurance companies, file their affidavits-in-reply on May 22 and MyCC file its affidavit on June 6.
The court asked all parties to file further affidavits, if needed, as well as file their written submissions on Aug 10 and replies to the written submissions, if any, on Sept 1.
In judicial review cases, leave (permission) has to be gained first before the merits of the review is heard to make sure the application is not frivolous, vexatious and an abuse of the court process.
MyCC was represented by Datuk V Sithambaram, Kwan Will Sen, Ruebankumar Asokan, Muayyad Khairulmaini and Wong Chee Chien, while many lawyers appeared for the insurance companies.
In September last year, The Edge reported that the three-member CAT panel chaired by Datuk Dr Choo Kah Sing ruled that MyCC had committed a fundamental error in its finding on law and facts.
The other members of the panel were Datuk Asmabi Mohamad and Datuk Dr Victor Wee Eng Lye.
“MyCC's reliance on Section 4(2)(a) of the Competition Act 2010 as the deeming provision to find the Piam members circular 132 had infringed the prohibition under Section 4(1) of the Act is flawed.
“The tribunal finds that the Piam members circular 132 in 2011 did not infringe Section 4(1) of the Competition Act 2010. Hence it follows that there is no finding of liability on the part of the insurers and Piam under the anti-competition law,” the decision by CAT on Sept 2 stated.
On Sept 30, 2020, Piam and its members expressed disappointment with the final decision made by MyCC on Sept 14, 2020 against the association and its 22 general insurers members.
Piam said MyCC found that the association and the insurers had infringed the Competition Act 2010 in relation to the arrangement between Piam and the Federation of Automobile Workshops Owners' Association of Malaysia (Fawoam) on minimum hourly labour rates and spare part prices of six commonly used types of vehicles, namely Proton, Perodua, Naza, Nissan, Toyota and Honda.
Circular central to the issue
Central to the issue is circular 132 issued by Piam in 2011, where it states that the survey findings indicated overwhelming support from the Claims Management Subcommittee's recommendations for parts trade discounts and labour rates.
The subcommittee recommended parts trade discounts of 25% for the six vehicle makes of Proton, Perodua, Nissan, Toyota, Honda and Naza and 15% for the Proton Saga base line model, and labour rates of RM30 per hour, but Piam members may apply either the Thatcham Repair Times or Opinion Times options.
For special cases, where repairers have to purchase parts with low trade discounts due to urgency, or they are unable to offer trade discounts of 25%, insurers may consider the merits of each case, subject to verification from appointed adjusters and proof of purchase invoice.
The members’ circular was dated July 28, 2011, but CAT noted the Competition Act 2010 came into effect on Jan 1, 2012.
In overturning the MyCC decision, CAT found that it is inaccurate to state the parts trade discounts and labour rates were determined by insurers.