Court rejects Loob's bid to keep Tealive outlets open while firm appeals injunction
Posted on 5 July 2018 - 07:26pm
Last updated on 5 July 2018 - 11:41pm
sunbiz@thesundaily.com
KUALA LUMPUR: The Court of Appeal has rejected Loob Holding Sdn Bhd’s bid to keep its Tealive outlets open while it appeals a court ruling that prohibits it from operating as a competing business to Chatime for a period of two years here.
Loob’s application, filed a day after the Court of Appeal’s ruling on the interim injunction on June 27, was rejected on the grounds that the company breached various contractual and legal obligations to La Kaffa International Co Ltd related to its restraint of trade obligations and Malaysia’s franchise law, thereby prohibiting Loob from operating Tealive as a competitor to Chatime for two years in Malaysia in accordance with the law.
Loob has been operating 161 Tealive outlets in Malaysia for more than a year. Their closure will affect 800 staff. Loob has since expanded Tealive overseas, including in China, Australia, India and Vietnam.
Chatime Malaysia group managing director Aliza Ali praised the decision by the court, stating that the verdict strengthens confidence for more international franchisors to build trade ties in the country.
She said she is, however, mindful of the repercussions on the livelihood of the employees and outlet owners who will be directly affected by the injunction, along with customers who have been its business priority from day one.
“Within the scope allowed by relevant laws, we would welcome former Chatime franchisees and employees who have been affected by the whole ordeal to contact us should they require assistance from us. Our decision to allow those affected outlets to return and reoperate under Chatime was made in regards to the overwhelming requests in light of the recent injunction granted by the court. Our doors are open to the employees and outlet owners who have found themselves in this precarious position today. They are our priority at the moment,” said Aliza.
Loob said in a separate statement it had on Wednesday filed for leave to appeal to the Federal Court against the Court of Appeal’s decision. Its lawyers have been instructed to make the necessary application to the Federal Court to maintain the status quo and the application was filed today.
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