PT Garuda Indonesia is 95.5% owned by the Republic of Indonesia , with the rest of its shares held by government-controlled entities. Its executive is composed mostly of Indonesian government officials. So, when the Australian Competition & Consumer Commission (ACCC) went after Garuda for an alleged anti-competitive arrangement with other airlines to impose surcharges on commercial freight services, the airline pleaded sovereign immunity. The ACCC took the position that Garuda’s alleged acts were part of commercial activity that was not protected by the sovereign status of its owners. Two levels of court dismissed Garuda’s motion for summary dismissal of the ACCC proceedings, and the High Court of Australia agreed: PT Garuda Indonesia Ltd v Australian Competition & Consumer Commission, [2012] HCA 33. The court reviewed US, Canadian and English jurisprudence on the exception to sovereign immunity that the law now makes for commercial activity or transactions, concluding that Garuda’s activities in the conduct of commercial airline freight services to Australia were clearly of ‘a commercial, trading and business character’, and thus not subject to the principle of sovereign immunity.

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