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ARTICLE · 29 SEPTEMBER 2012

Garuda’s foreign state immunity claim

PT Garuda, the national airline of Indonesia, cannot use the Foreign State Immunities Act to hide from ACCC prosecution.

AustraliaAntitrust/Competition Law

PT Garuda, the national airline of Indonesia, will not be able to use the Foreign State Immunities Act to protect itself from ACCC prosecution.

Garuda has been one of many airlines (others include Singapore, Emirates and Cathay Pacific) investigated by the ACCC for price fixing and placing some dodgy surcharges on air freight.

If found guilty, the fines can be more than $10 million, or 3x the value of the benefit obtained by the airline.

Understandably not wanting to pay this fine, when the ACCC commenced proceedings in the Australian courts to prosecute Garuda, the airline claimed protection under the Foreign State Immunities Act.

How? The airline is owned by the Indonesian government, which as a foreign state, is ordinarily immune from the jurisdiction of the Australian courts.

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