Air NZ to court: Overseas deals are beyond New Zealand jurisdiction

AIR NEW ZEALAND told the High Court in Auckland that it cannot be prosecuted in New Zealand for alleged price fixing on inbound cargo because the market exists in another country, reported the New Zealand Press Association.


Air New Zealand lawyer Alan Galbraith, QC, said the law suggested that if a cargo flight to New Zealand began in Hong Kong, the market for transporting the goods was in Hong Kong and not New Zealand.


"A common sense test shows that in all but the rarest cases, air cargo goes only one way, from origin to destination. Using the Hong Kong example, commercial common sense indicates Hong Kong is the market. It was the only place where a choice between suppliers could be exercised and trade could take place," said Mr Galbraith.


New Zealand Commerce Commission lawyer Brendan Brown said the argument over jurisdiction raised fundamental questions about the interpretation of the Commerce Act, and the commission's ability to enforce breaches.


"Specifically, the commission alleges that price-fixing arrangements, both in New Zealand and overseas, generated higher prices for air cargo services provided to and from New Zealand, and consequently for downstream markets to the detriment of companies and consumers within New Zealand," Mr Brown said.


Air New Zealand, Cathay Pacific Airways, Emirates, Japan Airlines, Korean Air Lines, Malaysian Airlines System, Singapore Airlines and Thai Airways are accused of colluding to raise the price of freight between 2000 and 2006.


The case, before Justice Raynor Asher, is expected take more than a month, the outcome of which will determine whether the court will price fixing charges. Hearings on that would be heard in July 2012.


In April, the High Court imposed fines of NZ$1.6 million (US$1.2 million) of NZ$6 million against British Airways and Cargolux. The court also confirmed a NZ$6.5 million fine against Qantas, the amount of which was determined through plea bargaining.


Another Air NZ lawyer, John Blair said outside the court: "This case is not about collusion, it is about whether prices approved by foreign regulators for all airlines operating from those countries can breach New Zealand competition law."
(Source:http://www.schednet.com)