Court Of Appeal Prohibits Tealive From Continuing Their Chatime-Like Business

The court ruling was delivered yesterday, 27 June.

The Court of Appeal granted an injunction filed by Chatime owner, La Kaffa International Co Ltd against Tealive owner, Loob Holding Sdn Bhd yesterday, 27 June

Justice Datuk Hamid Sultan Abu Backer

Image via UKM

Justice Datuk Hamid Sultan Abu Backer said in a written judgement that the High Court in Kuala Lumpur had erred in their decision to dismiss the injunction previously.

Last year, High Court Judicial Commissioner Wong Kian Kheong threw out the injunction based on the risk of injustice it would cause to Loob and its associates. 

However, Hamid wrote that the complaint of La Kaffa, in crude terms, means that Loob had changed the name of Chatime to Tealive overnight.

Hamid added that Loob's conduct breached legal obligations related to restraint of trade, and franchise law which does not encourage criminal or tortious conduct of business.

As it was "a fact" that Loob was using Chatime's assets to run Tealive, Hamid ruled that the injunction was needed as the prohibition order backs the breach of obligation.

An injunction is a court order to stop a party from doing anything that either threatens or invades the legal right of another

If a party fails to comply with an injunction, it will face criminal or civil penalties such as a fine and even imprisonment. 

In light of the ruling, Loob announced that they will be filing an application for a stay and for leave to appeal to the Federal Court

In an official statement issued earlier today, 28 June, Loob said that lawyers have been instructed to make the necessary application to the courts to allow the company to maintain status quo until the entire legal process is settled. 

Loob added that they will "let the due process of law take its course".

The Malaysian Insight reported that the injunction will be held back until an ongoing arbitration involving Loob and La Kaffa at the Singapore International Arbitration Centre is decided on.

Nonetheless, Tealive seemed to be unaffected by the court ruling as of this morning

Tealive announced an offer for their members on Instagram earlier today, signalling that business operations remain unaffected by the decision last night.

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