Tealive can keep bubbling brews for now as court battle with Chatime continues

  • Nation
  • Monday, 16 Jul 2018

PUTRAJAYA: Loob Holding Sdn Bhd can continue to serve its brand of bubble tea - Tealive- after obtaining a stay of execution of an injunction against it.

The Federal Court granted the stay order today to temporarily stop an injunction given by the Court of Appeal on June 27 to Loob Holding’s rival Taiwanese tea company La Kaffa International Co Ltd.

La Kaffa had sought the injunction to stop Loob Holding from operating a business similar to the Chatime bubble tea brand.

In a statement issued immediately after the stay order was granted, Bryan Loo, CEO of Loob Holding said all Tealive stores will remain in business as usual.

“On behalf of the Tealive team, we would like to thank everyone for their continued trust and support. Our lawyers will continue to handle the ongoing court matter until final resolution,” said Loo on Monday (July 16).

The fight between the two leading bubble tea operators will continue to brew as the case moves on to its final legal avenue at the Federal Court.

Last month, the Court of Appeal granted an interim injunction against Loob Holding from continuing its operations following an appeal by La Kaffa. The Court of Appeal ruled on June 27 that the injunction was allowed on grounds of breach of post-franchise terms and the return of its properties.

In the majority judgment on Thursday penned by Court of Appeal judge Justice Dr Hamid Sultan Abu Backer, a three-member panel of the court ruled that Loob Holding had committed a self-induced misconduct.

“Loob Holding’s strongest point canvassed before us is that the business is ongoing and has expanded. However, they have not produced case laws to support that these grounds are sufficient to seek a stay,” said Justice Dr Hamid Sultan. The second judge on the panel Justice Badariah Sahamid agreed with him.

A dissenting judgment by the Court of Appeal held that the interim stay of the injunction sought by Tealive would very likely be for a relatively short period and yet the hardship and inconvenience caused to innocent third parties such as the workers, their family members would simply be too great.

The dissenting judgment penned by the third judge Justice Rhodzariah Bujang said there were special circumstances to grant a stay of the injunction.

“If the injunction is not stayed pending the leave application, all 179 outlets of Tealive in Malaysia would have to cease operations and all 1,171 of the employees working with Tealive would be out of job. This scenario is not just a mere fear of losing business, customers, suppliers and goodwill”.

“The hardship and inconvenience will not only be suffered by the company but also to the innocent employees and their families which numbered more than a thousand as well as the owners of the premises where Tealive operates.

“There would be no prejudice to La Kaffa if stay is granted because the transgression of its right by Tealive would adequately be compensated by damages,’’ it said.

On Feb 17 last year, La Kaffa sought the injunction to stop Loob Holding from selling similar products as theirs.

Company director Chen Zhao, through his affidavit, claimed Loob Holding had breached the terms of the main franchise agreement.

The dispute between La Kaffa and Loob Holding started in early December 2016 when the Taiwanese company terminated the master franchise agreement between the two parties even though there was more than 20 years left on the deal.

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