Singapore Airlines 2014 Annual Report Download - page 186

184
NOTES TO THE FINANCIAL STATEMENTS
31 March 2014
SINGAPORE AIRLINES
36 Contingent Liabilities (in $ million) (continued)
(a) Cargo: Investigations by Competition Authorities and Civil Class Actions (continued)
In December 2012, SIA Cargo confirmed its acceptance of settlement agreements with the Australian Competition and
Consumer Commission and the New Zealand Commerce Commission, bringing to an end civil penalty proceedings
concerning the air cargo issues which had been initiated in 2008. SIA Cargo agreed to pay a penalty and costs amount
of AUD12.2 million ($15.5 million) in Australia. In New Zealand, SIA Cargo agreed to pay a penalty and costs amount
of NZD4.4 million ($4.4 million). SIA Cargo paid these amounts in December 2012 and January 2013 in accordance
with Australian and New Zealand laws respectively. The total Australian and New Zealand settlement amount of
$19.9 million has been reflected in the exceptional items of the Group’s accounts in FY2012/13.
In January 2014, the Swiss Competition Commission announced a fine against SIA Cargo and the Company of
CHF1.7 million ($2.3 million) in respect of the air cargo issues. This amount has been reflected as exceptional items in
the Group’s accounts. SIA Cargo and the Company have filed an appeal to the Swiss Federal Administrative Tribunal
seeking annulment of the decision.
After the investigations commenced, civil damage lawsuits were filed in the United States, Canada, Australia, South
Korea, England, the Netherlands and Norway by private parties against several airlines, including SIA Cargo and the
Company. Other lawsuits have been threatened by customers of SIA Cargo or shippers that purportedly contracted with
SIA Cargo’s customers.
The plaintiffs in the South Korea proceedings withdrew their complaint in July 2011 and the proceedings were
accordingly dismissed without prejudice. In January 2014, a shipper from South Korea which purportedly contracted
with SIA Cargo’s customers served a claim against SIA Cargo and other airlines. SIA Cargo is defending this proceeding.
In June 2011, without admitting any liability, SIA Cargo and the Company reached a settlement with the plaintiffs in
Canada whereby SIA Cargo agreed to pay CAD1.05 million ($1.3 million) to resolve all liability of SIA Cargo and the
Company as concerns the civil damage lawsuits filed in Canada. This amount has been reflected as an exceptional item
in the Group’s accounts in FY2011/12.
In December 2013, without admitting any liability, SIA Cargo and the Company reached a settlement with the class
action plaintiffs in the United States whereby SIA Cargo agreed to pay USD62.8 million ($78.3 million) to resolve
all liability of SIA Cargo and the Company as concerns the air cargo class action lawsuits filed in the United States.
This amount has been paid and is reflected as an exceptional item in the Group’s accounts.
In March 2014, without admitting any liability, SIA Cargo and the Company reached a settlement with the class action
plaintiffs in Australia whereby SIA Cargo agreed to pay AUD5.6 million ($6.4 million) to resolve all liability of SIA Cargo
and the Company as concerns the class action lawsuit filed in Australia. This amount has been paid and is reflected as
an exceptional item in the Group’s accounts.
In addition, without admitting any liability, in 2012 and 2013, SIA Cargo reached settlements with certain of its
customers to resolve all pending and potential future civil damage claims regarding the air cargo issues. The settlements
have been reflected in the Group’s accounts in the financial year and the previous financial year. The individual terms
of such settlements are required to be kept confidential.
Apart from Canada, the United States and Australia, the filed cases remain in their respective procedural stages and
none have been tried thus far on their respective substantive legal merits.
Apart from the exceptional items noted above, it is premature to make a provision in the financial statements for the
other pending investigations, court proceedings, civil suits, or threatened claims as the outcome is uncertain.