The Competition Commission of Malaysia (MyCC) has been granted leave by the High Court in Kuala Lumpur to initiate a judicial review of the Competition Appeal Tribunal's decision to set aside the RM10 million financial penalty it imposed on both Malaysia Airlines System Bhd and AirAsia Bhd.

Justice Nik Hasmat Nik Mohamad delivered her decision in chambers today.

This case stems from a high profile share-swap and collaboration agreement entered between the two airlines in 2011.

MyCC in September 2013 found MAS and AirAsia to have infringed the prohibition on "market sharing", under Section 4(2) of the Competition Act 2010, in their collaboration agreement and both were imposed a penalty of RM10 million each.

The RM10 million fines imposed by MyCC were based on flights mounted by both AirAsia Bhd and MAS in the four months between Jan 1 and April 30, 2012, on the Kuala Lumpur-Kota Kinabalu, Kuala Lumpur-Kuching, Kuala Lumpur-Sandakan and Kuala Lumpur-Sibu routes.

However, on Feb 4 this year, the Competition Appeal Tribunal set aside MyCC's decision.

MyCC had three years ago found the two airlines guilty of “market sharing”.

"Market sharing is considered a serious infringement under the Act as it is deemed to have the object of significantly preventing, restricting, or distorting competition in any market for goods and services,” said MyCC chairperson Siti Norma Yaakob, who is a former Chief Judge of Malaya.

"When businesses agree to share markets, they are agreeing to stop competing at the expense of their consumers," she had said.