When you are on the hunt for bubble tea in Malaysia, one of the first names that always comes up is Chatime. Wait, no… it’s Tealive now, isn’t it?
In any case, Tealive is back in the news again with a brand new serving of controversy and legal issues.
The CanLaw Report broke the news yesterday that the Court of Appeal dismissed Tealive’s stay of execution. In layman’s term, the brand must close all 161 outlets nationwide immediately!
It is an extreme situation to be sure but how did we get to this point? For that, we need to take a look back to the start of this year.
Our story begins in January 2016 when the Taiwanese franchisors, La Kaffa International Co Ltd submitted an affidavit (a written statement to be used as evidence in court) stating that they suspected something was off about their dealings with Loob Holding Sdn Bdh.
In it, they stated that despite a decrease in orders for raw materials for Chatime, there was an increase in profits for Loob Holding.
The main allegation (among others) was that it is possible that unauthorized raw materials were being used in the preparation and distribution of a licensed franchised product. Yikes!
That was all we heard of the story for a time until January 6 of this year when The Star reported that Loob Holding, the local distributor of the Chatime brand, was seeking legal advice after La Kaffa International terminated its agreement with them.
Loob Holding came out with a press statement expressing concern over the fates of their “1000 over workers and their dependents”.
The media ran with the rhetoric and for a time, public opinion was in their favour.
Then came February 17 and with it, an announcement that Chatime would “rebrand” itself and become Tealive.
As Malaysians struggled to figure out how to pronounce “Tealive” (Tea Alive? Tea Live? Tea Leave?), Loob Holding quickly updated their designs and slogans in every outlet to reflect the change. All 161 of them!
The next major development in the case was in May 30 when the High Court in Kuala Lampur dismissed an injunction (an authoritative warning or order to prevent someone from doing something that infringes on the legal rights of another) by La Kaffa International. The injunction called for the immediate shutting down of all Tealive shops.
The dismissal meant that Tealive got to stay around and provide us with bubble tea and continued confusion over how to pronounce its name. (Seriously, how DO you pronounce it?!)
It looked like the courtroom drama between Loob Holding and La Kaffa International had ended in Loob Holding’s favor when the case was unexpectedly resurrected in the High Court on June 27.
Justice Datuk Hamid Sultan Abu Backer released a written statement which said that the High Court had made an error in their judgment and in dismissing the injunction previously. He went on to state that Tealive had broken laws related to restraint of trade, and franchise law.
With that, the case was back on.
That brings us back to the present, where the High court denied Tealive its stay of execution delaying the application of La Kaffa International’s injunction.
In short, La Kaffa International had demanded that Loob Holding shut down all Tealive outlets immediately and the High Court ruled in their favor.
This story would have ended on a sad note, reflecting on the more than 800 staff and their dependents who lost their jobs if not for a new development today.
In a dramatic turn of events, Chatime Malaysia has come out with a statement saying that it would offer to re-employ staff of Tealive who were affected by this court decision!
Is Chatime back from obscurity like a rising phoenix or are we seeing the birth of something new?
Only time will tell.
Header image source from here.