P T Garuda Indonesia Ltd v Australian Competition & Consumer Commission: Immunity under Foreign States Immunities Laws

In P T Garuda Indonesia Ltd v Australian Competition & Consumer Commission [2012] HCA 33 (delivered 7 September 2012) the High Court unanimously dismissed an appeal by P T Garuda Indonesia Ltd holding that Garuda has no claim to immunity under the Foreign States Immunities Act 1985 (Cth) from proceedings brought in the Federal Court by the Australian Competition and Consumer Commission.

The case arose from allegations by the Commission that, Garuda and several other airlines had engaged in anti-competitive conduct in relation to commercial freight services to Australia. The Commission argued that the anti-competitive conduct that had contravened the Trade Practices Act 1974 (Cth) s 45.

The Commission sought the remedies of an injunction, declaration and pecuniary penalties under the Act.  At issue was whether the appellant was immune under Foreign States Immunities Act 1985 from the exercise of jurisdiction by the Commission and whether the civil penalty proceedings concerned a commercial transaction.

In the High Court it was not in dispute that Garuda was a "separate entity" of the Republic of Indonesia but the Court held that, Garuda could not claim immunity because the proceedings against it concerned a “commercial transaction” as defined in the Act in s 11(1). It was found that the conduct alleged by the Commission against Garuda comprised dealings that were of a commercial trading and business character and it was no answer to the denial of immunity that the Commission’s proceedings were not brought to vindicate private law contractual rights.

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