Judge: Interim stay granted to Loob Holding ‘under special circumstances’

A customer picks up his TEALIVE order. — Picture via Facebook.com/TealiveAsia
A customer picks up his TEALIVE order. — Picture via Facebook.com/TealiveAsia

PUTRAJAYA, June 9 — There are special circumstances to grant an interim stay to Tealive bubble tea brand owner Loob Holding Sdn Bhd against the injunction order pending hearing of its leave to appeal application at the Federal Court, said Court of Appeal judge Datuk Rhodzariah Bujang who dissented.

In her seven-page dissenting judgment, Justice Rhodzariah said if the injunction was not stayed pending the leave application, all 179 outlets of Tealive in Malaysia would have to cease operation and 1,171 of its employees would be out of jobs.

She said the scenario was not just a mere “fear of losing business, customers and goodwill”, but a real ramification from disallowing the stay.

Justice Rhodzariah said the hardship and inconvenience would not just be suffered by the company but also the innocent employees and their families who numbered more than a thousand and also included the owners of the premises where Tealive operated.

On July 5, this year, the Court of Appeal three-man bench, in a majority decision, dismissed Loob Holding’s application for an interim stay against the appellate court’s earlier decision in granting an injunction to Chatime owner La Kaffa International Co Ltd to prohibit Loob Holding from operating its business similar to Chatime.

The majority decision was by Justice Datuk Dr Hamid Sultan Abu Backer and Datuk Dr Badariah Sahamid while Justice Rhodzariah dissented.

In her judgment released on the Judiciary’s website, Justice Rhodzariah said 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.

She 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 and if La Kaffa wins in the arbitration proceeding which was still pending in Singapore between the parties, all profits from the Tealive business would go to La Kaffa.

“Thus, in these circumstances I would allow the interim stay as prayed for but it is of course conditional upon the filing of the motion for leave to appeal to the Federal Court,” said Rhodzariah.

In the majority judgment disallowing the interim stay, Justice Hamid Sultan had said the special circumstances rule relied by Loob Holding to seek for the stay order, was not applicable in a case of self-induced misconduct.

In his 13-page judgment, he said Loob Holding (a former franchise holder of Chatime) by their own act was purportedly in breach of a contract and statutory obligation.

On June 27 this year, the Court of Appeal three-man bench comprising Justices Hamid Sultan, Badariah and Rhodzariah granted an injunction to La Kaffa against Loob Holding from carrying out a similar business as the tea house chain known for its bubble teas.

The High Court did not rule in favour of La Kaffa.

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.

Loob Holding has filed the application for leave to appeal at the Federal Court. — Bernama

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