Loob Holding’s Tealive files for leave at the Federal Court

The legal battle could lead to the ceasing of operations of 179 Tealive outlets


Loob Holding Sdn Bhd’s application for a stay of the Court of Appeal’s decision in the appeals case brought by La Kaffa International Co Ltd had been dismissed by the Court of Appeal yesterday.

The company said in a statement that it has instructed its lawyers to file for leave to appeal to the Federal Court against the Court of Appeal’s decision given on June 27, 2018, and the application had been filed yesterday.

“Its lawyers have been further instructed to make the necessary application to the Federal Court to maintain its status quo, and the said application was filed earlier this morning,” Loob said yesterday.

Meanwhile, the Court of Appeal had dismissed Loob’s application for a stay, with cost.

Justice Datuk Hamid Sultan Abu Backer argued that as it stands, there is no application for leave to appeal to the Federal Court.

“In consequence, the order for stay ordinarily cannot be granted more so when there is a criminal element as mentioned earlier.

“Loob’s application for a stay in principle is a matter for the Federal Court to consider, and the Court of Appeal should not be seen lending support for the leave application itself, when its judgment had taken cognisance of the undisputed facts that Loob is operating a business in breach of statutory protection given to La Kaffa, which attracts a criminal sanction,” he said in a 13-page written judgement. He dismissed the stay of application with RM15,000 costs.

Hamid said: “It is trite that an order for stay is discretionary in nature and the court ought not to lean in favour of a person who by conduct is perceived to have breached the contractual obligation, as well as statutory obligation, with knowledge that he is likely to cause a loss to the other person.”

Last month, the Court of Appeal granted an injunction against Tealive from continuing its operations by La Kaffa.

Taiwan-based La Kaffa had filed the appeal after the High Court in May last year dismissed its injunction bid sought to prevent Loob from continuing its business, which La Kaffa said was similar to theirs.

The injunction granted by the Court of Appeal was based on breach of post-franchise terms and return of its properties.

The legal battle could lead to the ceasing of operations of 179 Tealive outlets with around 800 employees.

La Kaffa terminated the Chatime master franchisee contract with Loob in December 2016 (despite having 20 years left on the deal), following a dispute between the two parties in relation to the use of unauthorised ingredients and outstanding payments for raw materials.

Loob then rebranded the Chatime outlets to the Tealive brand, while La Kaffa appointed Will Group as a licensor of Chatime in Malaysia.