UPDATE 3-Air France-KLM, 10 others win fight against EU cargo cartel fines

* General Court says grounds of EU decision contradictory
* Airlines also facing damages claims due to cartel decision
* BA, Japan Airlines, Singapore Airlines also in EU ruling

(Adds Commission comment, updates Air France-KLM shares)
By Michele Sinner and Foo Yun Chee
LUXEMBOURG, Dec 16 (Reuters) - Air France-KLM AIRF.PA and
10 other airlines won a challenge against almost 800 million
euros ($874 million) in fines for fixing air freight charges
after Europe's second highest court said it had found
contradictions in the EU decision.
The European Commission said in a 2010 finding that 11 air
cargo carriers fixed surcharges for fuel and security costs from
December 1999 to February 2006, acting as a global cartel.
Air France took the biggest hit with a fine of 182.9 million
euros while KLM came in second at 127.2 million euros. The two
carriers merged to form Air France-KLM in 2004. British Airways'
penalty stood at 104 million euros.
The EU decision has since made the carriers a focus of
damages claims from companies such as Germany's Deutsche Bahn
DBN.UL , carmaker BMW BMWG.DE and car supplier Bosch.
The airlines subsequently challenged the EU antitrust
enforcer's decision. Judges agreed with their arguments on
Wednesday, annulling the EU competition enforcer's fines.
The court backed the airlines' view that the Commission had
considered four distinct cartel infringements, while the grounds
for its decision were based on the sense of there being one
single and continuous period of wrongdoing. The court said that
penalised companies must be able to understand and to contest
liability.
"The grounds and the operative part of the decision are
contradictory," the judges said.
The Commission said it would examine the ruling and the next
steps.
"We note that the Court did not rule on whether the
Commission could prove the infringement or not," the EU
executive said in a statement.
Air France-KLM's shares extended gains after the court
verdict and were trading up 1.1 percent at 1617 GMT. The carrier
said it had outstanding provisions for 380 million euros
connected to the fines, including interest.
The other airlines involved in the case are Air Canada
AC.TO , Martinair, British Airways ICAG.L , Cargolux, Cathay
Pacific Airways 0293.HK , Japan Airlines 9201.T , LAN Chile,
SAS SAS.ST and Singapore Airlines SIAL.SI .
Lufthansa LHAG.DE , which escaped a sanction because it
blew the whistle on the cartel, also took legal action because
it disagreed with the Commission's view that there was a single,
continuous infringement. Qantas QAN.AX , which was fined 8.9
million euros, did not challenge the Commission's decision.
($1 = 0.9143 euros)