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.