BUBBLE tea chain Tealive’s operation is in jeopardy after it lost its application for a stay in the Court of Appeal’s ruling in favour of its former master franchisor, Chatime.

The Federal Court today upheld the appellate court’s ruling that Tealive breached post-franchise terms and dismissed the application with costs.

Tealive brand owner Loob Holding Sdn Bhd in a statement said that it was aware of the ruling and has filed for leave to appeal to the Federal Court against the Court of Appeal’s decision.

Taiwan-based La Kaffa International Co Ltd, which owns the Chatime franchise, had sought and was granted an injunction to restrain Loob Holding from operating a rival bubble tea business under the name Tealive, which has 161 outlets and 800 employees in Malaysia.

In the ruling today, the court said that the application was dismissed as it “ought not 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 loss to the other person”. 

In December 2016, La Kaffa terminated the master franchise agreement with Loob Holdings with  20 years left on the deal. Loob Holdings chief executive officer Bryan Loo lodged a police report over the sudden termination, but later agreed to La Kaffa’s contract termination on January 20.

The Malaysian then created Tealive, while La Kaffa appointed Will Group to be the licensor of Chatime here.

La Kaffa claimed Loob Holding had stolen its tea franchise in Malaysia.

In May last year, the Kuala Lumpur High Court dismissed an injunction bid from La Kaffa against Loob Holdings doing a similar business.

There is separate arbitration ongoing at the Singapore International Arbitration Centre involving the two firms. – July 5, 2018.