PUTRAJAYA: A Court of Appeal judge today said La Kaffa International Ltd would not suffer any prejudice if Loob Holding Sdn Bhd, which operates Tealive outlets, is allowed an interim stay.
Justice Rhodzariah Bujang, in her minority judgment, said Loob could compensate La Kaffa, the owner of Chatime, a popular bubble milk tea brand from Taiwan, because the transgression of its right would be adequately compensated by damages.
“In fact, the High Court had already ordered the respondent (Loob) to affirm an affidavit every month to state the amount of gross monthly sales from Tealive, and if the appellant (La Kaffa) wins in the arbitration proceeding still pending in Singapore, all profits would go to the appellant,” she said in a seven-page judgment made available to the media today.
On June 27, La Kaffa obtained an injunction to stop Loob from operating its business similar to theirs.
The Tealive brand was created by Loob after it exited a franchise agreement with La Kaffa.
Loob was formerly a Chatime franchise holder in Malaysia.
The dispute between La Kaffa and Loob started in early December 2016 when the Taiwanese company terminated the master franchise agreement between the two parties even though there were more than 20 years left on the deal.
Loob has filed a fresh application to lift the injunction in the Federal Court pending the outcome of its application for leave to appeal in the Federal Court.
Justice Hamid Sultan Abu Backer, who delivered the majority ruling, said the special circumstances rule relied on by Loob to seek the stay order on July 4, was not applicable in a case of self-induced misconduct.
Justice Badariah Sahamid concurred with Hamid.
Rhodzariah said all 179 outlets of Tealive in Malaysia would have to cease operation and all 1,171 of its employees would lose their jobs if the injunction was not stayed.
She said this scenario presented not merely a “fear of losing business, customers, suppliers and goodwill” but a real ramification from disallowing the stay.
She said the hardship and inconvenience would not just be suffered by Loob but its employees and their families which numbered more than 1,000.
These included the owners of the premises where Tealive operated and with whom Loob had entered into tenancy agreements, she added.
Rhodzariah said the interim stay would likely be for a relatively short period.
“Yet the hardship and inconvenience caused to the innocent third parties, particularly the employees and their families, would simply be too great,” she said, adding that those were the special circumstances to allow Tealive to remain in operation.