PUTRAJAYA: Malaysians can continue to enjoy Tealive bubble tea as its operator, Loob Holding Sdn Bhd, has obtained a stay of execution of an injunction against it.
The Federal Court granted the stay order to temporarily stop the injunction granted 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.
Federal Court judges Justices Ramly Ali, Balia Yusof Wahi and Mohd Zawawi Salleh allowed the application for stay, saying there were special circumstances in the case.
Loob Holding sought the stay order pending hearing of its leave to appeal application against the Court of Appeal’s decision to grant the interim injunction to La Kaffa.
On June 27, the Court of Appeal granted La Kaffa the interim injunction which barred Loob Holding from operating a business similar to the Chatime bubble tea brand pending the disposal of its arbitration dispute for breaching of franchise agreement at Singapore Inter-national Arbitration Centre.
On May 29 last year, La Kaffa lost its case to obtain the injunction at the High Court.
On Feb 17 last year, La Kaffa sought the injunction to stop Loob Holding from selling similar products.
La Kaffa 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 although there was more than 20 years left on the deal.
In yesterday’s proceedings, Loob Holding’s counsel Datuk Loh Siew Cheang submitted that there were 1,171 Tealive employees at 179 outlets throughout the country and these employees would be out of job if the stay was not granted and the company had to cease operations.
Loh further argued that La Kaffa did not ask for any relief of injunction in its arbitration proceedings in the island republic but it only asked for damages.
Another counsel for Loob Holding, Christopher Leong, said there were 252 employees in addition to the 1,171 workers who would have their employment terminated.
“The respondent (La Kaffa) expects us to do that with the snap of a finger. If the respondent wants the damages, it is not from us,” he said.
Leong also said there would be no prejudice if the stay was granted as the High Court had ordered the company to affirm affidavit on its gross sales each month to La Kaffa.
La Kaffa’s counsel Khoo Guan Huat argued that his client did not seek an injunction in the arbitration dispute because it was not a lawsuit.
Khoo said Loob Holding has eight other franchise businesses and therefore, the employees from Tealive outlets could be absorbed into the other businesses.
“We are not restraining Tealive from running a business. The company can run Tealive but we are saying do not copy our menu,” he added.