11th LAWASIA International Moot 2016 C 1015 - R

Kuala Lumpur Regional Centre for Arbitration

Kuala Lumpur, Malaysia

Chelsea Tea Company

(Claimant)

v

Almond Tea Company

(Respondent)

Memorial for Respondent

Table of Contents

Index of Authorities ................................................................................................................................ 2

Statement of Jurisdiction ......................................................................................................................... 5

Questions Presented ................................................................................................................................ 6

Statement of Facts ................................................................................................................................... 7

Summary of Pleadings .......................................................................................................................... 10

Pleadings ............................................................................................................................................... 12

A.Applicable Law ................................................................................................................................. 12

I.Substantive law ............................................................................................................................... 12

II. Procedural Law ............................................................................................................................ 14

B.Whether or not ATC has breached the Agreement by distributing Sailor’s Ceylon affixed with the

ATC mark in Malaysia .......................................................................................................................... 15

I.Unfair Contract ............................................................................................................................... 15

II. SAILOR’S CEYLON Affixed with ATC Mark in Malaysia ....................................................... 16

C.Whether or not ATC’s use of the word CEYLON in respect of its tea products is misleading ........ 18

D.Whether or not ATC’s use of the ATC Mark amounts to trademark infringement and/ or passing

off. ......................................................................................................................................................... 19

Prayer for Relief .................................................................................................................................... 23

Index of Authorities

Resolutions and Documents:

KLRCA i-Arbitration Rules as produced by the Kuala Lumpur Regional Centre for Arbitration

KLRCA Abitration Act 2005 (Revised 2011)

UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION

New York Convention (Article V.I (d))

UNIDROIT Principles of International Commercial Contracts 2010

Intellectual Property Corporation of Malaysia Act 2002

MALAYSIA Trademark Act - Act 175 of 1976 as amended by Act A1138 of 2002

Contracts Act 1950 of Malaysia

Articles and Digests:

Distribution Agreements: A Lawyer’s Perspective; Craig Simpson and Jean-Nicolas Maillard;

FECC International Trade Committee 13 November 2014, Brussels

Choice of law in IC; Lew

Directorate General for Internal Policies Policy Department A: Scientific and Economic Policy

Internal Market And Consumer Protection Misleading Packaging Practices Briefing Paper

http://www.pureceylontea.com/index.php/features/lion-logo (Official website of SLTB)

The impact of packaging, price and brand awareness on brand loyalty: Evidence from the paint

retailing industry; Manilall Dhurup; Chengedzai Mafini; Tshepiso Dumasi

http://klrca.org/faqs/what-are-the-klrca-i-arbitration-rules/ (Official website of the Kuala

Lumpur Regional Centre for Arbitration)

http://www.mipa.org.my/trademark.html (Official website of Malaysian Intellectual

Property Association)

http://www.myipo.gov.my/cap-dagangan (Official website of the Intellectual Property

Corporation of Malaysia)

https://readinglaw.wordpress.com/2009/05/19/exclusion-clauses-and-unfair-contract-

terms-part-2/

Malaysia Trademark Infringment; Contributing firm Skrine ;Authors Charmayne Ong Poh Yin

Partner; Adriani Wahjanto Legal Assistant

MALAYSIA TM Committee Country REPORT 2010 By Jern Ern CHUAH

Cases:

Channel Tunnel Group Ltd v. Balfour Beatty Construction Ltd [1993] AC 334

Slide & Hide System (S) Pte Ltd v Chua Seng Guan [2009] SGHC 191

MALAYSIA: Plus and More in Chips: the Battle of the Chocolate Chip Cookies; Contributor:

Gladys Mirandah, Patrick Mirandah Co., Kuala Lumpur; Verifier: Joshua Kevin Sathiaseelan,

Kevin & Co., Kuala Lumpur; http://www.southeastasia-iprhelpdesk.eu/en/node/311

Jack Wills Ltd v House of Fraser (Stores) Ltd [2016] EWHC 626 (Ch), [2016] All ER (D) 89

(Apr)

Danone Biscuits Manufacturing (M) Sdn Bhd v Hwa Tai Industries Bhd [2010] 4 CLJ 711

Comic Enterprises Ltd v Twentieth Century Fox Film Corporation

Chocosuisse Union des Fabricants Suisses de Chocolat (a co-operative society formed under

title XXIX of the Swiss Code of Obligations) & Ors v Maestro Swiss Chocolate Sdn Bhd & Ors

[2010] 3 MLJ 676; [2010] 5 CLJ 794

Lockheed Martin Corporation v Raytheon Company [2010] 4 CLJ 95

Meidi-Ya Co Ltd Japan & Anor v Meidi (M) Sdn Bhd [2009] 2 CLJ 15 (Federal Court)

McLaren International Limited v Lim Yat Meen [2009] 4 CLJ 749 (Federal Court)

Dun & Bradstreet (Singapore) Pte Ltd v Dun & Bradstreet (Malaysia) Sdn Bhd ([1993] 2 All

Malaysian Report 3304)

Reckitt & Colman (Products) Ltd v Borden Inc ([1990] Weekly Law Reports 493

Sinma Medical Products (M) Sdn Bhd v Yomeishu Seizo Co Ltd ([2004] 4 Malayan Law

Journal 358),

Aspect Synergy Sdn Bhd v Banyan Tree Holdings Limited [2009] 8 CLJ 97

Bambino Mio Ltd V Cazitex Nv

Wooley v Up Global Sourcing UK Ltd

Dun & Bradstreet (Singapore) Pte Ltd v Dun & Bradstreet (Malaysia) Sdn Bhd ([1993] 2 All

Malaysian Report 3304)

Statement of Jurisdiction

Almond Tea Company (ATC) (hereinafter “Respondent”) has submitted the present

contractual dispute before the Kuala Lumpur Regional Centre for Arbitration (hereinafter

“KLRCA”), pursuant to the terms of the arbitration agreement between the Parties and Rule

1(1) of the Rules.1

of Arbitration of the KLRCA, to be read together with Article 1 of the UNCITRAL Arbitration

Rules 2010.The Parties shall accept any Judgment of the Tribunal as final and binding upon

them and shall execute it in its entirety and in good faith.2

1 KLRCA i-Arbitration Rules as produced by the Kuala Lumpur Regional Centre for Arbitration; KLRCA Abitration Act 2005 (Revised 2011) 2 UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION

Questions Presented

A. What is the applicable law that should be referred to in this dispute?

B. Whether or not ATC has breached the Agreement by distributing Sailor’s Ceylon

affixed with the ATC mark in Malaysia

C. Whether or not ATC’s use of the word CEYLON in respect of its tea products is

misleading

D. Whether or not ATC’s use of the ATC Mark amounts to trademark infringement and/

or passing off.

Statement of Facts

Chelsea Tea Company (herein referred to as CTC) is a company registered under Companies

Act No: 07 of 2007 of Sri Lanka, specialized in the manufacturing and sale of Sri Lankan tea

which is famously referred to in the world tea market as “Ceylon Tea”. It is registered under

the Sri Lanka Tea Board (herein referred to as SLTB) which is the apex regulatory and

administrative body of the Sri Lankan tea industry comprising of various public as well as

private sector players of the local tea industry.

As per the purview of its registration with the SLTB, CTC has obtained the necessary rights to

utilize the famous lion insignia (Attachment 1) which is the trademark to distinguish “pure

Ceylon tea” from other tea in the local and world market.

However, the exclusive sole proprietorship of the lion insignia and the rights stemming from

this sole proprietorship rests with SLTB and the power delegated to the CTC with regards to

the trademark is restricted to the right of usage and not the right of ownership.

CTC prints the lion insignia on the packaging of all its products.

CTC enters into a contract coming into operation on 20th of October 2008, for a period of 5

years with Almond Tea Company (herein referred to as ATC). The purpose of the contract is

for ATC to be the sole and exclusive distributor of CTC products in Malaysia (recognised as

the “Territory” in which the Agreement would practically be enforceable).

The comprehensive Agreement between CTC and ATC was entered into after protracted

negotiations between the two parties. It can be noted that ATC’s Agreement to the contract was

driven by their unfortunate disposition of their tea plantations been affected by a fungal disease.

It must also be observed that the CTC heavily benefitted from its business partnership with

ATC where utilizing the market expertise of the Distributor, CTC developed a strong consumer

base in Malaysia where in 2012 sales in Malaysia conducted by ATC amounted to 35% of

global net revenue of CTC. Therefore, it can be concluded that CTC was affected favourably

by this business venture and that ATC dutifully fulfilled its role as the sole Distributor for CTC

in Malaysia.

This Agreement was not renewed after its natural expiration and therefore the parties are now

recognised not be bound by this contract as the contractual adventure of the Agreement has

been outlived.

In March 2015, it was brought to the attention of CTC that its former business partner ATC,

has been manufacturing tea in China and packaging it with a trademark bearing the picture of

a lion (Attachment 2) under the brand name of “Sailor’s Ceylon” since November of 2012. The

sale of this product of ATC is within Malaysia.

This business venture of ATC was seen as a violation of clause 4.2 and certain sub clauses of

clause 9 (clause dealing with Intellectual Property) in the contract. Clause 4.2 reads “During

the Term and for a period of 12 months after it the Distributor must not be concerned or

interested, either directly or indirectly, in the manufacture or distribution in the Territory of

any goods that compete with the Products, affixed with the Trade Marks or any other arguably

similar mark in the Territory.”

The use of a lion symbol was also seen as a trademark infringement on the part of ATC.

Upon these claims CTC wrote to ATC asking that ATC pay damages for breach of the

Agreement and requesting ATC to stop using a logo with a lion on the package of their tea and

to not use the word “Ceylon” to describe the tea products.

ATC replied by stating that it has not breached the Agreement and therefore they will not give

in to CTC’s demands. ATC contends that they have every right to use the word “Ceylon” on

their tea products and that they also are of the view that it is well within their legal rights to use

the ATC’s Mark on their tea packages.

As there was a contention on the legitimacy of the trade conducted by ATC both parties

proceeded to resolve the conflict as per Clause 22 of the Agreement which details the conflict

resolution procedure as being Arbitration under the following conditions.

1) 22.1 Any dispute, controversy or claim arising out of or relating to this contract, or the breach

thereof, shall be governed by and construed according to the relevant applicable legislation,

and shall be settled by arbitration in accordance with the KLRCA i-Arbitration Rules.

2) 22.2 The number of arbitrators shall be three. The place of arbitration shall be Colombo, Sri

Lanka. The language of the arbitration shall be English.

Summary of Pleadings

As the Agreement has not explicitly demarcated the applicable or governing law to the dispute

the Arbitral Tribunal shall decide what law should be referred to in this dispute.

By the application of the principle of conflict of laws and established thinking and trends in

International Arbitration, it can be deduced that the applicable law in resolving the dispute at

hand is Malaysian Law.

However the procedural law that will be followed by the arbitrators in hearing the dispute will

be Sri Lankan law as the seat of Arbitration is Sri Lanka.

The Respondent propounds that the two grounds of claim on the part of CTC, namely,

1) Breach of Contract on the part of ATC

2) Trademark infringement on the part of ATC

are invalid due to the following grounds of rationale presented by the Respondent. Therefore

allowing such claims of CTC would be injustice against the Respondent, namely, ATC. The

following grounds would also dictate the answers to the main questions before the respected

Tribunal from the perspective of the Respondent.

It is believed that the overall Agreement between CTC and ATC bears a favouration towards

CTC where majority of the clauses are constructed in a manner to benefit CTC by either

completely limiting or removing CTC’s liability or by allowing CTC complete discretion to

act in circumstances without the consultation of ATC.

The words “or any other arguably similar mark” found in the clause 4.2 is found to be vague

which makes the clause unenforceable as per Contracts Act 1950 of Malaysia, in the context

of ATC using a mark with a lion on it. The vagueness stems from the fact that what is “arguably

similar” is highly subjective.

AS SLTB did not possess the exclusive rights over the words “CEYLON TEA” or “SYMBOL

OF QUALITY” the argument of the Claimant that the use of the word CEYLON by ATC was

misleading.

The Claimant pleads that ATC’s actions does not amount to Trademark Infringement as per

this burden of proof because there are clearly seen differences between the brand names of the

two tea products as well as the logos used.

Pleadings

A.Applicable Law

Regarding the applicable law for the arbitration, when the parties have failed to choose a law

governing the contract; arbitration rules and laws uniformly provide that the arbitrators shall

make this determination, and generally give them broad discretion to do so.

Art.35 of the Rules provides that the arbitral tribunal shall apply the rules of law designated by

the parties; failing such designation by the parties, the arbitral tribunal shall apply the law,

which it determines to be appropriate. [The Rules, part II Section IV, Art.35, 1] In this case,

the parties failed to designate the rules of law, therefore the appropriate laws have to be

discussed.3

I.Substantive law

Traditionally, when arbitrators have had to determine the law of the contract, they have applied

conflicts of laws rules to determine which substantive law is most appropriate. Normally, they

do this by considering various factors that connect a particular State law to the transaction. The

case at hand presents a clear contract between the Claimant and the Respondent and thus there

is no ambiguity in relation to the applicability of the principle of conflict of laws.

In this case the Claimant is a Sri Lankan entity. The Respondent is a Singaporean entity that

carried out business in Malaysia. The Agreement was signed and all operations pertaining to

3 KLRCA i-Arbitration Rules as produced by the Kuala Lumpur Regional Centre for Arbitration KLRCA Abitration Act 2005 (Revised 2011)

the Agreement took place in Malaysia. Thus these three jurisdictions must be considered in

determining the applicable substantive law in this dispute.4

It is thus necessary to determine which state has the greater interest in the application of its

law. Under the most significant relationship test used in choice of law cases, factors such as;

place of the alleged contracting or where the relationship is centered, place of negotiating the

alleged contract, place of the alleged performance, place of the subject matter, place(s) of

incorporation and business of the parties are deemed to be deciding.

Although the products were of Sri Lankan origin and supplied by a company incorporated in

Sri Lanka and the distributor was a company incorporated in Singapore; the business

relationship of the parties was centered in Malaysia, the contract was negotiated and entered

into in Malaysia, the contract was performed in its entire capacity in Malaysia and the dispute

in concern is based entirely on the business activities of both the parties within the territory of

Malaysia.

Therefore the Agreement must be interpreted in the light of the applicable law in Malaysia.

However, there is another school of thought among International arbitrators that most

international commercial disputes can and should be resolved according to the contract and

relevant usages, without reference to the governing law and so very little depends on the

governing law. Basing the core interpretation of an agreement/contract on what the parties

intended, agreed and expected.

Hence, the Claimant argues; regardless of the applicable substantive law the actions of the

Respondent amount to a clear breach of the Agreement in concern. 5

4 Chapter 6 KLRCA Arbitration Act 2005 (Revised 2011); Article 35 KLRCA Arbitration i- Rules 5 Choice of law in ICA, Lew

II. Procedural Law

The procedural law of the arbitration is sometimes referred to as the lex arbitri or curial law.

The procedural law that will apply depends on the place, or 'seat', of the arbitration.

The orthodox theory stands as the law of the seat is necessarily the procedural law governing

the arbitration. The underlying principle behind this stance is the presumption that the law of

the “seat” was “irresistible” in the absence of an explicit choice of some other law.6

The seat of the arbitration in this case is Colombo, Sri Lanka with the consensus of the parties

to the Agreement.7

The procedural law determines to what extent the local courts will be involved in the process,

for example: any formalities to be complied with, the extent to which the arbitration agreement

excludes court jurisdiction, how much autonomy and discretion the parties have in choosing

the arbitral procedure, what support the court will give to the arbitration, whether the decision

of the arbitral tribunal can be appealed and what timescales will apply and enforceability of the

award.

Thus the Tribunal of Kuala Lumpur Regional Center for Arbitration will thereby decide on the

dispute abiding by the procedural law guided by the substantive law identified above.

6 Channel Tunnel Group Ltd v. Balfour Beatty Construction Ltd [1993] AC 334; New York Convention (Article V.I (d)) 7 KLRCA i- Arbitration Rules - Rule 6 Seat of Arbitration; Article 18 Place of Arbitration

B.Whether or not ATC has breached the Agreement by distributing Sailor’s Ceylon affixed

with the ATC mark in Malaysia

I.Unfair Contract

ATC is a leading manufacturer and seller of tea in the Malaysian tea market which holds an

applaudable grasp on the tea market even prior to it entering into an agreement with CTC for

sole and exclusive Distributorship. This overall business persona of ATC grants it the freedom

of enterprise as an established commercial institution, to produce and sell tea in the Malaysian

market. The claims (c) which orders ATC to stop using the word Ceylon in its tea brand

“Sailor’s Ceylon” and (d) to discontinue the sale of any tea tagged as Ceylon Tea by

withdrawing the products from the market, are seen as a fundamental violation of ATC’s

freedom of enterprise as a legitimate business operating in a regional scale.

It is believed that the overall Agreement between CTC and ATC bears a favouration towards

CTC where majority of the clauses are constructed in a manner to benefit CTC by either

completely limiting or removing CTC’s liability or by allowing CTC complete discretion to

act in circumstances without the consultation of ATC. 8

For example, clauses such as 5.7, 12.2 and 16.4 strictly limit the liability of the Supplier thereby

transferring liability onto the Distributor. Furthermore, clause 5.2 allows the Supplier complete

discretion to suddenly terminate the sale of the products to the Distributor or amend the type

of products to be sold by the Distributor without any consultation with ATC.

Such terms of the Agreement as deemed to be unfair as it removes a level and equal playing

field between the contracting parties. This overall unfair nature of the Agreement puts to test

8 https://readinglaw.wordpress.com/2009/05/19/exclusion-clauses-and-unfair-contract-terms-part-2/

the validity of the Contract as a whole and questions the fairness of holding the Respondent as

being bound by the Contract.

It must be noted that the Respondent, namely, ATC was coerced into entering such an

Agreement despite its unfavourable nature due to the loss of its tea plantations to a fungal

disease. If not for this unfortunate disposition, the likelihood of ATC contracting with CTC is

minimal which is seen by the Chairman of ATC, Mr. Phillip Chan, being very reluctant to

partner with the Managing Director of CTC, Mr. Marvan Ranatunga upon their first encounter

at the BOH Tea Plantation in the Cameron Highlands in Malaysia.

The overall unfairness and invalidity of the Contract extends to clause 4.2 as restricting ATC

from conducting business 12 months post to the expiration of the Contract is seen as an unfair

restriction on ATC’s freedom of enterprise because within the 5 years in which the Contract

was operating ATC would have been able to restore their tea plantations to former glory and

thereby renter the market as a tea manufacturer and not only a Distributor.

II. SAILOR’S CEYLON Affixed with ATC Mark in Malaysia

The words “or any other arguably similar mark” found in the clause 4.2 is found to be vague

which makes the clause unenforceable as per Contracts Act 1950 of Malaysia, in the context

of ATC using a mark with a lion on it. The vagueness stems from the fact that what is “arguably

similar” is highly subjective.9

The Kuala Lumpur Centre for Regional Arbitration (KLRCA) i-Arbitration Rules which are

recognised in the Agreement as being the rules governing arbitration only stipulate the

procedure by which a consensus can be achieved through arbitration and not the law that is

9 Contracts Act 1950 of Malaysia

applicable in this particular instance. Furthermore, as KLRCA i-Arbitration Rules are of

Shariah compliant and suitable for arbitration of disputes arising from commercial transactions

premised on Islamic principles, the suitability of these principles in arbitrating this case must

be evaluated.

When looking at the logos themselves we see several characteristic differences between the

ATC lion insignia and the CTC lion mark. The observations are listed in the following table.

Characteristics of the CTC Lion Insignia Characteristics of the ATC Mark

Lion bears a traditional outlook characteristic

of pre modern art in Sri Lanka

Lion bears the outlook of a general clipart

drawing

Lion is carrying a sword Lion is not carrying a sword

Lion is filled in black ink and bears white

spots

Lion is outlined in black ink with a white

filling

The logo does not have a year mentioned The logo has the year 1972 mentioned

These significant difference in features in the logos aids in establishing that there is no

“arguable similarity” between the two logos as per clause 4.2 in the agreement.10

10 MALAYSIA: Plus and More in Chips: the Battle of the Chocolate Chip Cookies; Contributor: Gladys Mirandah, Patrick Mirandah Co., Kuala Lumpur; Verifier: Joshua Kevin Sathiaseelan, Kevin & Co., Kuala Lumpur; http://www.southeastasia-iprhelpdesk.eu/en/node/311; Jack Wills Ltd v House of Fraser (Stores) Ltd [2016] EWHC 626 (Ch), [2016] All ER (D) 89 (Apr); Wooley v Up Global Sourcing UK Ltd

C.Whether or not ATC’s use of the word CEYLON in respect of its tea products is

misleading

When looking at the brand names we see that the product of CTC is named “CTC Ceylon”

while the product of ATC is “Sailor’s Ceylon”. As the only similarity between these two names

us the use of the word “Ceylon” this births the question as to whether or not the word Ceylon

must be used exclusively in a state where the tea is produced and sold by a process originating

in Sri Lanka. 11When evaluating the use of the phrase Ceylon Tea by the SLTB as well as the

Export Development Board (EDB) of Sri Lanka one may see that this phrase is often

superseded with the words “Pure” and “Quality” to confirm originality of the tea as being a

complete product of Sri Lanka. This coinage shows that the phrase “Ceylon Tea” cannot be

exclusively reserved as being owned by one company or franchise due to the broad applicability

of the phrase. This argument is supported by the SLTB not being granted trademark rights over

the words “Ceylon Tea” and “Symbol of Quality” when the heraldic lion insignia was

registered with MyIPO post to filling a TM5 application form.

11 http://www.pureceylontea.com/index.php/features/lion-logo (Official website of SLTB)

D.Whether or not ATC’s use of the ATC Mark amounts to trademark infringement and/ or

passing off.

It is confirmed that ATC’s actions of using the ATC Mark on “Sailor’s Ceylon” tea does not

amount of trademark infringement nor does it amount to passing off. This confirmation is

based upon the famous Common Law precedent set out in the ChipsMore case heard in

Malaysia.12

In this case a British manufacturer of biscuits has been selling cookies in Malaysia for more

than 20 years, and has had a registered trade mark 'ChipsMore' for these goods during that time.

A Malaysian company started manufacturing and selling cookies under the brand 'ChipsPlus.'

And therefore the British manufacturers sued the local company on the basis of Trademark

infringement and Passing Off.

The burden of proof in establishing that the Respondent committed Trademark Infringement

was set out in this case as the British company having to prove that the Malaysian company's

brand so nearly resembled their own that it was likely to deceive or cause confusion in the

course of trade in relation to their own products.

Similarly the burden of proof in establishing Passing Off on the part of the Malaysian Company

was set out as the British company having to prove that the Malaysian company was

misrepresenting their goods as being connected with the British company. They also had to

12 MALAYSIA: Plus and More in Chips: the Battle of the Chocolate Chip Cookies; Contributor: Gladys Mirandah, Patrick Mirandah Co., Kuala Lumpur; Verifier: Joshua Kevin Sathiaseelan, Kevin & Co., Kuala Lumpur; http://www.southeastasia-iprhelpdesk.eu/en/node/311; Chocosuisse Union des Fabricants Suisses de Chocolat (a co-operative society formed under title XXIX of the Swiss Code of Obligations) & Ors v Maestro Swiss Chocolate Sdn Bhd & Ors [2010] 3 MLJ 676; [2010] 5 CLJ 794

prove that their own brand had acquired 'goodwill' and reputation in the marketplace, and that

they would suffer damage as a result.

In this particular case we see that ATC’s actions does not amount to Trademark Infringement

as per this burden of proof because there are clearly seen differences between the brand names

of the two tea products as well as the logos used.

Therefore it can be concluded that the use of the word Ceylon by ATC in its brand name does

not constitute a trademark infringement13

The second requirement in establishing trademark infringement is that the so called

resemblance between the two logos would result in a confusion for the buyer ergo defeating

the Choice Function and Marketing Function (recognised functions of a trademark logo as per

MyIPO). It is argued that such a confusion would not arise due to the obvious characteristic

differences in the trademark and also the fact that CTC Ceylon tea which has been in the

Malaysian market bearing the lion insignia for many years, has created for itself a loyal

customer base with the aid of ATC.

In order to prove that ATC committed the civil crime of Passing Off the Claimant must prove

that the Respondent had an intention to misrepresent their goods as being connected to CTC

and through this connection exploit the goodwill and market acquired by CTC in Malaysia. It

is proposed that such an intention did not firmly exist with ATC because as stated in the facts

of the case, ATC was an industry leader in the tea market of Malaysia prior to its engagement

with CTC and therefore ATC had its own acquired goodwill and consumer base. It must also

be reaffirmed that it was CTC who benefitted greatly by the stronghold and good name borne

13 s. 40 MALAYSIA Trademark Act - Act 175 of 1976 as amended by Act A1138 of 2002

by ATC in the Malaysian tea industry. Therefore the acts of ATC does not indicate mala fide

aim to invade the customer base of CTC in Malaysia. 14

The final claim of requiring ATC to withdraw from the market all products bearing the ATC

mark and under the name “Sailor’s Ceylon” does not give any due attention to the losses that

may be incurred by ATC through this sudden exit from the market. As ATC has been trading

under this name since 2012 it has invested heavily in building up its brand name for the past

four years and in establishing the necessary market infrastructure for the sale of their products.

The immediate withdrawal from the market would result in a huge loss on the part of ATC and

dent the consumer confidence in the product name “Sailor’s Ceylon”. Therefore it is affirmed

that this claim is unfair on the part of ATC which is a reputed business enterprise.

Additionally the claimant makes an assumption that the growing market demand for Sailor’s

Ceylon tea of ATC is only based on the use of the lion logo and the use of the word “Ceylon”

in its name. This discredits the overall quality of the ATC tea product and the influence of the

name ATC has on the Malaysian market. It is the burden of the Claimant to prove that the sales

of the ATC were only driven by these two factors which necessitates the removal of these two

factors so as to ensure equity.

As per the IP Laws of Malaysia it is only a registered trademark owner that is granted rights

over the use of that trademark. As the proprietorship of the heraldic lion insignia rests with the

SLTB it is argued that CTC only possess the right to utilise this insignia and not the right to

ownership over it which in turn grants the right to sue another user of the insignia. The four

claims of CTC can only be exercised if CTC held proprietorship over the lion insignia and the

14 Malaysia Trademark Infringment; Contributing firm Skrine ;Authors Charmayne Ong Poh Yin Partner; Adriani Wahjanto Legal Assistant

term Ceylon which it does not. Ergo the claims of CTC are seen as invalid as it is not within

the parameters granted to them by the law.15

15 MALAYSIA Trademark Act - Act 175 of 1976 as amended by Act A1138 of 2002

Prayer for Relief

Upon the fundamental grounds of breach of contract and trademark infringement by ATC, the

Claimant requests that the Arbitrator grants the following relief.

(a) Payment of damages to be determined by the profits of ATC made by the sale of SAILOR’S

CEYLON in Malaysia

(b) An order that parties can only refer to tea grown and manufactured entirely in Sri Lanka as

‘Ceylon Tea’

(c) An order directing ATC to stop using the name ‘SAILOR’S CEYLON’, the ATC’s Logo,

or any other name or mark containing the word ‘CEYLON’ or a lion device if its tea does not

originate from Sri Lanka

(d) An order directing ATC to discontinue the sale of its products described as ‘Ceylon tea’

and to recall all such products from the market.