KUALA LUMPUR, Aug 30 — Tealive operator Loob Holding Sdn Bhd and Taiwan’s Chatime owner La Kaffa International Co Ltd have agreed to an out-of-court settlement, after almost two years of dispute involving the Chatime bubble tea brand.
In a joint statement today, the companies said a settlement agreement was executed yesterday where both parties will withdraw all proceedings in Malaysian courts and arbitration in Singapore.
“This settlement shall not constitute nor be deemed nor treated by any party as an admission of any allegation and/or liability.
“Parties have come to an agreement in resolution of their disputes, in which the decision has also been made to stop all court or any other enforcement actions against each other,” the statement read.
The companies added that the joint press statement is also part of the terms of the settlement.
“Both parties have agreed that all the other terms shall remain private and confidential,” it said.
La Kaffa International Co Ltd, founded in Taiwan in 2005, was the first public-listed bubble tea company in the country.
It made a name for itself with its signature and best-selling “pearl” milk tea under the brand Chatime.
The one-time franchise relationship between the two companies began in 2010 when Bryan Loo of Loob Holdings opened the first Malaysian Chatime outlet in a major shopping mall in Kuala Lumpur.
Initially, the contract was to run until 2041.
However, in January last year La Kaffa terminated its franchise agreement with Loob on January 5, after accusing the latter of purchasing raw materials from a third party.
It also claimed that the former franchisee owed it US$644,536.32 (RM2.866 million) in outstanding payments.
Loob then reportedly launched a new brand called Tealive to replace its 161 Chatime outlets in Malaysia.
This led La Kaffa to file for a court injunction, earlier in March, to stop Loob from continuing to sell bubble milk tea under its rebranded image.
A few days later, La Kaffa announced a new Chatime Malaysia master licensor, Will Group.