PUTRAJAYA: Loob Holding Sdn Bhd, the owner of the Tealive bubble tea brand, can remain in business for now pending its appeal to set aside an injunction obtained by Chatime Taiwanese owner La Kaffa International Co Ltd.
A three-man Federal Court bench, chaired by Ramly Ali, today said there were special circumstances to allow Loob Holding’s application for an interim stay of the injunction.
Others on the bench were justices Balia Yusof Wahi and Mohd Zawawi Salleh.
The Court of Appeal last month allowed La Kafaa’s application to stop Tealive from conducting a similar business.
The court in a majority ruling had also refused to give Loob Holding an interim stay pending disposal of its appeal to the Federal Court.
Loob Holding’s lawyer Loh Siew Cheang today told the bench that the lifting of the injunction would not cause any injustice to La Kaffa pending arbitration proceedings in Singapore.
“La Kaffa will be awarded damages if arbitrators ruled that Loob Holding had breached the franchise agreement,” he said.
He said the High Court had already ordered Loob Holding to affirm an affidavit every month to state the amount of gross monthly sales from Tealive.
He said if La Kaffa won in the arbitration proceeding, all profits would go to the company.
Counsel Christopher Leong, appearing with Loh, said his client was portrayed negatively in the Court of Appeal as being a cheat.
“It is not appropriate to seek an injunction and stop Tealive’s operations.
“It would also affect the livelihoods of 1,171 employees and lead to the termination of contracts with third parties and banking facilities,” he said.
La Kaffa’s lawyer Khoo Guan Huat said Tealive’s employees could be deployed to eight other business concerns under Loob Holding.
“We only want an injunction against Tealive and not Loob Holding’s other business interests,” he said.
Khoo said La Kaffa only wanted to restraint Tealive from copying its menu.
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 were more than 20 years left on the deal.
The Tealive brand was created by Loob Holding after it exited a franchise agreement with La Kaffa.