C 1010-C

THE 11TH LAW ASIA INTERNATIONAL MOOT COURT COMPETITION

AT THE KUALA LUMPUR REGIONAL CENTRE FOR ARBITRATION

2016

CASE CONCERNING THE CEYLON TEA

BETWEEN

THE CHELSEA TEA COMPANY

(CLAIMANT)

AND

THE ALMOND TEA COMPANY

(RESPONDENT)

MEMORIAL FOR THE CLAIMANT

ii

TABLE OF CONTENTS

Table of Contents ................................................................................................................. ii

Index of Authorities ............................................................................................................. vi

Statement of Jurisdiction .................................................................................................... xi

Statement of Facts .............................................................................................................. xii

Questions Presented ........................................................................................................... xiv

Summary of Pleadings ........................................................................................................ xv

Pleadings ................................................................................................................................ 1

I. The Sri Lankan laws and KLRCA i-Arbitration Rules govern the procedural

aspect and the Malaysian laws govern the substantive aspect of the dispute ............. 1

A. The KLRCA i-Arbitration Rules and the laws of Sri Lanka govern the procedure

of this arbitration ............................................................................................................. 1

1. The Parties agreed to use the KLRCA i-Arbitration Rules ................................. 2

2. The law of seat of arbitration indicates the Sri Lankan laws to be the

procedural law ............................................................................................................. 2

B. The Malaysian laws govern the substantive merits of this arbitration .................... 3

1. The Malaysian laws govern the contractual claims arising out of the

Agreement ................................................................................................................... 4

2. The Malaysian laws govern the non-contractual claims relating to the

Agreement ................................................................................................................... 5

II. The distribution of SAILOR’S CEYLON affixed with the ATC’s Mark in

Malaysia breaches the Agreement ................................................................................... 6

iii

A. The Respondent is bound by the obligations under the Agreement when it

commenced the distribution of SAILOR’S CEYLON ................................................... 6

1. The Parties entered into the Agreement with their free consent ......................... 6

2. The Agreement was in force throughout the assented time frame ...................... 7

B. The Respondent’s distribution of SAILOR’S CEYLON affixed with the ATC’s

mark in Malaysia is in breach of the non-compete clause imposed by the Agreement .. 7

1. The Respondent is concerned or interested in the distribution of the SAILOR’S

CEYLON in Malaysia during the restricted period .................................................... 8

2. The ATC’s Mark is arguably similar to the Lion Logo ...................................... 8

3. SAILOR’S CEYLON is the same type of products as CTC CEYLON ............. 9

C. The distribution of SAILOR’S CEYLON affixed with ATC’s mark breaches the

restrictions on intellectual property imposed by the Agreement .................................... 9

1. The ATC’s Mark of the Respondent is so resembling the Lion Logo as to be

likely to cause confusion or deception ...................................................................... 10

2. SAILOR’S CEYLON is so resembling CTC CEYLON as to be likely to cause

confusion or deception .............................................................................................. 11

D. The Claimant is entitled to seek for payment of damages .................................... 12

III. The respondent’s use of the word ‘Ceylon’ in respect of its tea product is

misleading ........................................................................................................................ 13

A. The word ‘Ceylon’ is geographical indication that is eligible for protection ....... 13

1. The word ‘Ceylon’ corresponds to the meaning of ‘geographical indication’ . 14

2. The protection is granted despite no registration as geographical indication in

Malaysia .................................................................................................................... 14

3. The word ‘Ceylon’ is or has not ceased to be protected in its country or

territory of origin ....................................................................................................... 15

iv

4. The word ‘Ceylon’ has not fallen into disuse in their country or territory of

origin ......................................................................................................................... 15

5. The word ‘Ceylon’ is a within the extent of protection .................................... 16

B. The use of the word ‘Ceylon’ in relation to the Respondent’s tea business is

misleading ..................................................................................................................... 16

1. The Respondent’s use of the word ‘Ceylon’ in respect of its tea product is

untrue ........................................................................................................................ 17

2. Such use of indication misleads the public as to geographical origin and

standard of the goods ................................................................................................ 17

i. Geographical origin of the goods is misled .................................................. 17

ii. Standard and quality of the goods are misled ............................................... 19

C. The Claimant has right to seek for reliefs ............................................................. 19

IV. The Respondent’s use of the ATC’s Mark constitutes a trade mark

infringement and/or passing off ..................................................................................... 20

A. The Respondent’s use of the ATC’s Mark amounts to a trade mark infringement

under the Malaysian Trade Marks Act .......................................................................... 20

1. The Respondent is neither the registered proprietor nor the registered user of

the Lion Logo .......................................................................................................... 21

2. The ATC’s Mark is so nearly resembling the registered Lion Logo as is likely

to deceive or cause confusion ................................................................................... 22

3. The Respondent is using the ATC’s Mark in the course of trade ..................... 22

4. The Respondent is using the ATC’s Mark in relation to goods within the

registered mark’s scope of registration ..................................................................... 22

v

5. The Respondent is using the ATC’s Mark in such a manner as to render the use

likely to betaken as being used as a trade mark ...................................................... 23

B. The Respondent’s use of the ATC’s Mark constitutes extended passing off ....... 23

1. The Claimant has acquired sufficient collective goodwill in the Lion Logo .... 24

2. The Respondent has represented its tea products as if they had complied with

the standards of the SLTB ......................................................................................... 25

3. The damage is likely to be caused as a result of the Respondent’s

misrepresentation ...................................................................................................... 25

C. The Claimant is entitled to seek for cessation of the Respondent’s use of the

ATC’s Mark .................................................................................................................. 26

Prayer for Relief .................................................................................................................. 27

vi

INDEX OF AUTHORITIES

Treaties & International Agreements

Commission Regulation 864/2007, On the Law Applicable to Non-Contractual Obligations,

2007 O.J. (L 199) 40 ........................................................................................................... 5

Organization of American States Fifth Inter-American Specialized Conference on Private

International Law: Inter-American Convention on the Law Applicable to International

Contracts, March 17, 1994, OEA/Ser.K/XXI.5, CIDIP-V/doc.34/94 rev. 3 corr. 2, March

17, 1994, 33 I.L.M. 732 ...................................................................................................... 4

Rome Convention on the Law Applicable to Contractual Obligations, (originally enacted

June 19, 1980) (consolidated version) 2005 O.J. (C 334) 1 ............................................... 4

TRIPS: Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15,

1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, The

Legal Texts: The Results of the Uruguay Round of Multilateral Trade Negotiations 320

(1999), 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994) ................................................... 13, 21

Statutes

Arbitration Act, 1995 (Sri Lanka) ........................................................................................... 3

Contracts Act, 1950 (Malay.) .................................................................................................. 7

Geographical Indications Act, 2000 (Malay.) ..................................................... 14, 15, 16, 20

Intellectual Property Act, 2003 (Sri Lanka) .......................................................................... 15

Trade Marks Act, 1976 (Malay.) ..................................................................................... 21, 22

Cases

Arsanovia Ltd v. Cruz City 1 Mauritius Holdings [2012] E.W.H.C. 3702 ............................ 1

Bollinger v. Costa Brava Wine Co. Ltd., [1961] 1 W.L.R. 271 ........................................... 17

Case C-206/01, Arsenal Football Club Plc. v Matthew Reed, 2002 E.C.R I-10273 ............ 23

vii

Case No. 5717 of 1990, 1 ICC Bull. 22 (ICC Int’l Ct. Arb.) .................................................. 5

Case No. 6527 of 1991, 18 Y.B. Comm. Arb. 46 (ICC Int’l Ct. Arb.) ............................... 3, 4

Channel Tunnel Group Ltd v. Balfour Beatty Construction Ltd, [1993] A.C. 334 ................ 1

Chocosuisse v Cadbury, [1998] R.P.C. 117.................................................................... 24, 25

Coffee Partners, Inc. v. San Francisco Coffee and Roastery, Inc., G.R. No. 169504 (Mar. 3,

2010) (Phil.) ...................................................................................................................... 12

Fabrique Ebel Societe Anoynme v. Syarikat Perniagaan Tukang Jam City Port, [1988] 1

M.L.J. 188, 191 ................................................................................................................. 21

Fage UK Ltd. & Anor v. Chobani UK Ltd. & Anor, [2013] E.W.H.C. 630 (Ch) ................ 24

Festina Lotus SA v. Romanson Co. Ltd., [2010] 4 S.L.R. 552 ..................................... 10, 11

Government of India v. Cairn Energy Pty [2012] 3 M.L.R.A. 1 ............................................ 2

Hai Tong Co (Pte.) Ltd. v. Ventree Singapore Pte. Ltd. and another appeal, [2013] 2 S.L.R.

941..................................................................................................................................... 10

Kuwait Airways Corp v. Iraqi Airways [2002] 2 A.C. 883 .................................................... 1

Lloyd Schuhfabrik Meyer v. Klijsen Handel BV, [1999] 2 C.M.L.R. 1343 ........................ 10

Maestro Swiss Chocolate Sdn. Bhd. v. Chocosuisse Union Des Fabricants Suisses De

Chocolate & Another Appeal, No. 02(f)–97–12/2012(W); 02(f)–42–04/2014(W) (Fed.

Ct. of Malay. Feb. 3, 2016) ............................................................................................... 18

Perry v. Truefitt, (1842) 49 ER 749 ...................................................................................... 23

Philips Export B.V. v. Court of Appeals, G.R. No. 96161, 206 S.C.R.A. 457 .................... 12

Polo/Lauren Co. L.P. v. United States Polo Ass’n, No. 13 of 2015 (Sing. High Ct. March 8,

2016) ................................................................................................................................. 10

Regina v. Johnstone, [2003] 1 W.L.R. 1736 ......................................................................... 23

S.Tous, S.L. v. Ng Wee Ping, [2010] S.G.I.P.O.S. 6 ............................................................ 10

viii

Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC

20 (7 March 2012) ............................................................................................................ 19

Sinma Medical Products (M) Sdn. Bhd. v. Yomeishu Seizo Co. Ltd., [2004] 3 C.L.J. 815 25

Sports Connection Pte Ltd. v. Deuter Sports GmbH, [2009] 3 S.L.R. 883 ............................ 9

St. John Ambulans Malaysia v. PJ Uniform Sdn. Bhd., [2014] 1 L.N.S. 1534 .................... 26

Staywell Hospitality Group Pty. Ltd. v. Starwood Hotels & Resorts Worldwide, Inc.,

[2014] 1 S.L.R. 911........................................................................................................... 10

The Pianotist Co. Ltd., (1906) xxiii R.P.C. 774 ................................................................... 11

Wagamama v. City Centre Restaurants, [1995] F.S.R. 713 ................................................. 11

Books

ALAN REDFERN ET AL., LAW AND PRACTICE OF INTERNATIONAL COMMERCIAL ARBITRATION

(Sweet & Maxwell Ltd. 4th ed. 2004) ............................................................................ 1, 2

ALESSANDRO CHECHI, THE SETTLEMENT OF INTERNATIONAL CULTURAL HERITAGE

DISPUTES (2014) ................................................................................................................. 3

IDA MADIEHA BT ABDUL GHANI AZMI, TRADE MARKS LAW IN MALAYSIA CASES AND

COMMENTARY (2006) ....................................................................................................... 23

IRENE CALBOLI & DANIEL GERVAIS, SOCIO-ECONOMIC ASPECTS OF GEOGRAPHICAL

INDICATIONS (2015) .......................................................................................................... 19

L. BENTLY & B. SHERMAN, INTELLECTUAL PROPERTY LAW 878 (4th ed. 2014). ............ 23, 24

PAMELA R. TEPPER, THE LAW OF CONTRACTS AND THE UNIFORM COMMERCIAL CODE (3d

ed. 2015) .............................................................................................................................. 6

SIMON GREENBERG ET AL., INTERNATIONAL COMMERCIAL ARBITRATION: AN ASIA-PACIFIC

PERSPECTIVE (2001) ........................................................................................................ 1, 2

ix

SOPHIE NEUMANN, Ubiquitous and multistate cases, in RESEARCH HANDBOOK ON CROSS-

BORDER ENFORCEMENT OF INTELLECTUAL PROPERTY (Paul Torremans ed., 2004) ........... 5

Articles

L.M. De Silva, Geographical Indications- Need of a Registration System for Sri Lanka, in

Proceedings of 8th International Research Conference; Law 43 (C.L. Goonasekara et al.

eds., 2015) ......................................................................................................................... 15

Lopez-Rodriguez, NEW ARBITRATION ACTS IN DENMARK AND SPAIN: THE APPLICATION OF

TRANSNATIONAL RULES TO THE MERITS OF THE DISPUTE, 23(2) J. Int. Arb. 125 (2006) ....... 3

Michael Leo Looney, Williston: Treatise on the Law of Contracts, 1-2 B.C. L. REV. 191

(1960) .................................................................................................................................. 7

Michael Pryles, Exclusion of the Model Law, 4(6) INT’L ARB. L.REV. 175 (2001) ............... 1

Dictionary

Replevin, Black’s Law Dictionary (10th ed. 2014) ............................................................... 11

Other Resources

Charles Haviland, Sri Lanka erases colonial name, Ceylon, BBC NEWS, Jan. 1, 2011,

http://www.bbc.com/news/world-south-asia-12099596 ................................................... 16

IVANA KUNDA & CARLOS MANUEL GONÇALVES DE MELO MARINHO, PRACTICAL

HANDBOOK ON EUROPEAN PRIVATE INTERNATIONAL LAW 16 (2010), available at

http://ec.europa.eu/justice/civil/files/ .................................................................................. 4

JEAN -MICHEL JACQUET, DISPUTE SETTLEMENT INTERNATIONAL COMMERCIAL

ARBITRATION 3 (2005), available at http://unctad.org/en/docs/edmmisc232add40_en.pdf.

............................................................................................................................................. 3

x

U.S. CENT. INTELLIGENCE AGENCY, The World Factbook: Sri Lanka,

https://www.cia.gov/library/publications/the-world-factbook/geos/ce.html (last visited

July 13, 2016).............................................................................................................. 14, 16

WIPO Forum on Private International Law and Intellectual Property, Jan. 30-31, 2001,

Private International Aspects of the Protection of Trademarks, WIPO/PIL/01/4 (Jan. 19,

2001) ................................................................................................................................... 6

WORLD INTELLECTUAL PROPERTY ORGANIZATION, Geographical Indications from

Darjeeling to Doha, WIPO MAGAZINE, Aug. 2007 ...................................................... 19

Worldwide Symposium on Geographical Indications, Bangkok, Thai., Mar. 27-29, 2013,

WIPO/GEO/BKK/13/INF/4 (Jan. 15, 2014) ..................................................................... 14

xi

STATEMENT OF JURISDICTION

The Chelsea Tea Company (“Claimant”) and the Almond Tea Company (“Respondent”)

(both as “Parties”) have agreed to submit the present dispute to arbitration under the

auspices of the Kuala Lumpur Regional Centre for Arbitration (“KLRCA”), and also

agreed to use the KLRCA i-Arbitration Rules. The Parties do not dispute the validity and

enforceability of the arbitration agreement, and any award rendered by the tribunal is

acknowledged to be final and binding upon the Parties as per Rule 12(7) of KLRCA i-

Arbitration Rules.

xii

STATEMENT OF FACTS

THE PARTIES TO THE ARBITRATION

The Claimant is the Chelsea Tea Company (“CTC”), a Sri Lankan manufacturer of Ceylon

tea under the brand name ‘CTC CEYLON’.

The Respondent is the Almond Tea Company (“ATC”), a Singaporean distributor of CTC

CEYLON and a manufacturer and distributor of black tea under the brand name

‘SAILOR’S CEYLON’.

FACTS SURROUNDING THE DISPUTE

The Sri Lankan Tea Board (“SLTB”) is a fully government-owned statutory institution and

is the apex regulatory and administrative body of the Sri Lankan tea industry. SLTB is the

registered trade mark proprietor in Malaysia of ‘the Lion Logo’, a mark which denotes that

any tea products affixed with it are grown and manufactured entirely in Sri Lanka by

approved traders that conform to the quality standards set by the SLTB. The Lion Logo is

also registered in many jurisdictions worldwide.

On 20 October 2008, CTC and ATC entered into the Distribution Agreement (the

“Agreement”), which results in ATC being the exclusive distributor of CTC CEYLON in

Malaysia. The Lion Logo is affixed on to the packaging of the CTC CEYLON tea products.

CTC is also the registered user of the Lion Logo in Malaysia.

It is agreed that during the 5-year term of the Agreement and for a period of 12 months

after it, ATC must not be concerned or interested, either directly or indirectly, in the

manufacture or distribution in Malaysia of any goods that compete with Ceylon tea

xiii

products bearing the ‘CTC CEYLON’ mark or the Lion Logo produced by CTC, affixed

with the ‘CTC CEYLON’ mark or the Lion Logo or any other arguably similar mark.

In January 2009, ATC has begun growing and manufacturing black tea in China, the seeds

of which are first sourced from Sri Lanka. Such tea products, affixed with its own non-

registered ‘ATC’s Mark’ are distributed under the brand name ‘SAILOR’S CEYLON’ in

Malaysia. ATC’s SAILOR’S CEYLON tea has never been declared as Ceylon tea in any

ATC’s advertisements.

CTC CEYLON is marketed mainly in Europe whereas SAILOR’S CEYLON is marketed

mainly in Southeast Asia. Both ATC and CTC’s products are widely available in major

supermarkets and grocery stores. They are also served in some cafes and restaurants. The

retail price range of SAILOR’S CEYLON and CTC CEYLON are similar.

AGREEMENTS FOR THE RESOLUTION OF THE DISPUTE

The Parties agreed to submit the dispute to the arbitration in accordance with the KLRCA i-

Arbitration Rules to determine whether the Respondent’s distribution of SAILOR’S

CEYLON affixed with the ATC’s Mark in Malaysia is in breach of the Agreement, the

Respondent’s use of the word ‘CEYLON’ in respect of its tea product is misleading, and

the Respondent’s use of the ATC’s Mark amounts to trade mark infringement and/or

passing off.

xiv

QUESTIONS PRESENTED

I. What is the law governing the procedural and substantive merits of this dispute.

II. Whether or not ATC has breached the Agreement by distributing SAILOR’S

CEYLON affixed with the ATC’s Mark in Malaysia.

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

misleading.

IV. Whether or not ATC’s use of the ATC’s Mark amounts to a trade mark

infringement and/or passing off.

xv

SUMMARY OF PLEADINGS

I. The procedural aspects of the arbitration shall be governed by the KLRCA i-

Arbitration Rules as designated by the Parties and the Sri Lankan laws as a result of the seat

of arbitration, which took place in Sri Lanka. The KLRCA i-Arbitration Rules, as well as

the Sri Lankan Arbitration Act points that the arbitral tribunal shall apply the laws

determined by conflict of law rules to the substantive merits of the dispute. The general

principle of conflict of laws further indicates that the Malaysian laws are applicable to

contractual claims, as it has the closet connection with the Agreement. It also points that the

Malaysian laws govern the non-contractual claims concerning intellectual property, as

Malaysia is the country where the protection of relevant intellectual property is claimed.

II. The Agreement binds both of the Parties to comply with the restrictions within the

assented Term. When the Respondent distributed SAILOR’S CEYLON affixed with the

ATC’s Mark in Malaysia, it has breached the Agreement on two grounds: 1) the non-

compete clause is violated because such distribution was made during the time frame that

the Agreement was still in force, 2) the restriction on Intellectual Property was also

contravened since its use of the ATC’s Mark and the brand name ‘SAILOR’S CEYLON’

are so resembling as to be likely to cause confusion. Therefore, the Claimant is eligible to

seek for payment of damages from the Respondent, the amount of which will be

determined by the profits of the Respondent made by the sale of SAILOR’S CEYLON in

Malaysia.

III. The word ‘Ceylon’ is a geographical indication, which is under the protection of the

Malaysian Geographical Indications Act. The use of such word in respect of tea products

that do not genuinely originate from Sri Lanka misleads the consuming public as to the

source of origin and the standard of goods. The Respondent’s misleading use entitles the

xvi

Claimant to seek for an order for cessation of use of the word ‘Ceylon’ in respect of its tea

products and an order directing sale discontinuity of its tea products described as ‘Ceylon

tea’ including a recall of all such products from the market.

IV. The ATC’s Mark of the Respondent is nearly resembling the Lion Logo as to be

likely to cause confusion or deception. As the Lion Logo is a protected trade mark under

the Malaysian Trade Mark Act, the use of the Respondent’s ATC’s Mark constitutes a trade

mark infringement. Moreover, as the Claimant has acquired a sufficient goodwill in the

Lion Logo in Malaysia, the Respondent’s use of such mark also amounts to the tort of

extended passing off. The Claimant is therefore entitled to the Respondent’s cessation of

the use of the ATC’s Mark.

1

PLEADINGS

I. THE SRI LANKAN LAWS AND KLRCA I-ARBITRATION RULES GOVERN THE

PROCEDURAL ASPECT AND THE MALAYSIAN LAWS GOVERN THE SUBSTANTIVE ASPECT

OF THE DISPUTE

Generally multiple laws may govern different aspects of an international

arbitration1; the procedural laws and the substantive laws may be different.2 The procedural

aspect of the present arbitration is governed by the KLRCA i-Arbitration Rules and the Sri

Lankan laws [A]. The applicable substantive law is the Malaysian laws [B].

A. The KLRCA i-Arbitration Rules and the laws of Sri Lanka govern the procedure

of this arbitration

The procedure of this arbitration is governed by both the institutional arbitral

rules designated by the parties and the procedural laws.3 Even in cases that parties have

designated their own institutional rules, it is necessary to identify the procedural law that

governs the arbitration as they lie down the parameters for international arbitration,

supplement the chosen rules, and deal with matters the parties have failed to address.4

Lex arbitri or the law of arbitration is a general principle of law governing the

arbitration in general and determines the procedural laws to be adopted in the arbitration.5

1 SIMON GREENBERG ET AL., INTERNATIONAL COMMERCIAL ARBITRATION: AN ASIA-PACIFIC PERSPECTIVE 96 (2001) . 2 Kuwait Airways Corp v. Iraqi Airways [2002] 2 A.C. 883; Channel Tunnel Group Ltd v. Balfour Beatty Construction Ltd, [1993] A.C. 334; Arsanovia Ltd v. Cruz City 1 Mauritius Holdings [2012] E.W.H.C. 3702. 3 GREENBERG, supra note 1, at 63. 4 ALAN REDFERN ET AL., LAW AND PRACTICE OF INTERNATIONAL COMMERCIAL ARBITRATION 83 (Sweet & Maxwell Ltd. 4th ed. 2004); Michael Pryles, Exclusion of the Model Law, 4(6) INT’L ARB. L.REV. 175, 177 (2001). 5 GREENBERG, supra note 1, at 58; REDFERN, supra note 4, at 86.

2

If parties have designated any institutional rules and they are inconsistent with the

procedural laws on certain matters, the former will prevail except to the extent that the latter

are mandatory.6

Therefore, in the present arbitration, both the KLRCA i-Arbitration as designated

by parties [1] and the Sri Lankan laws as indicated by lex arbitri [2] govern the procedural

aspect of this arbitration.

1. The Parties agreed to use the KLRCA i-Arbitration Rules

Clause 22.1 of the Agreement provides that “[a]ny 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.”7

The Parties have agreed to settle the present dispute in accordance with the

KLRCA i-Arbitration Rules which are the institutional arbitral rules;8 therefore, the KLRCA

i-Arbitration Rules govern the procedural aspect of this arbitration.

2. The law of seat of arbitration indicates the Sri Lankan laws to be the procedural law

Lex arbitri or the of arbitration determines the procedural law of the arbitration.9

The law at the seat or place of the arbitration determines the lex arbitri.10 If parties have

agreed on the place or seat of the arbitration, the arbitration is conducted under the procedural

law of that particular country.11

6 GREENBERG, supra note 1, at 63. 7 Appendix A: Distribution Agreement, Clause 22.1[hereinafter Agreement]. 8 Moot Problem, ¶17. 9 REDFERN, supra note 4, at 83-84; Government of India v. Cairn Energy Pty [2012] 3 M.L.R.A. 1. 10 GREENBERG, supra note 1, at 55. 11 REDFERN, supra note 4, at 85.

3

In the present dispute, as the Parties have agreed in Clause 22.2 of the Agreement

that “[t]he place of arbitration shall be Colombo, Sri Lanka.” Therefore, the laws of Sri

Lanka shall be the procedural law of this arbitration.

In conclusion, both the KLRCA i-Arbitration Rules and the laws of Sri Lanka

shall govern the procedural aspects of this dispute.

B. The Malaysian laws govern the substantive merits of this arbitration

Section 24 (2) of the Sri Lankan Arbitration Act [provides that where parties have

failed to designate any governing substantive law, “[t]he arbitral tribunal shall apply the law

determined by the conflict of laws rules which it considers applicable.”12

However, taking in account the denationalized or anational nature of international

arbitration, “[i]t seems settled that the arbitrators are not bound to the lex forum arbitri, in the

same sense as a national judge is subject to the lex fori.”13 This particularly means that the

arbitral tribunal is not restricted to only apply the law of the seat of arbitration as a

substantive law. On the other hand, a national judge is restricted to the law of the jurisdiction

where the action is brought and therefore needs to apply “[t]he conflict of law rules of the

State in whose name he does justice”.14 Moreover, Section 24(2) of the Sri Lankan

Arbitration Act does not explicitly state that the conflict of law rules as to be adopted by the

arbitral tribunal is restricted to only those of Sri Lanka.15 Therefore, the arbitral tribunal is not

bound to the conflict of law rules of Sri Lanka.

The issues that shall be resolved in this arbitration cover both contractual claims

12 Arbitration Act, 1995, § 24(2) (Sri Lanka). 13 Lopez-Rodriguez, NEW ARBITRATION ACTS IN DENMARK AND SPAIN: THE APPLICATION OF TRANSNATIONAL RULES TO THE MERITS OF THE DISPUTE, 23(2) J. Int. Arb. 125, 127 (2006); See Case No. 6527 of 1991, 18 Y.B. Comm. Arb. 46 (ICC Int’l Ct. Arb.). 14 ALESSANDRO CHECHI, THE SETTLEMENT OF INTERNATIONAL CULTURAL HERITAGE DISPUTES 175 (2014) ; JEAN -MICHEL JACQUET, DISPUTE SETTLEMENT INTERNATIONAL COMMERCIAL ARBITRATION 3 (2005), available at http://unctad.org/en/docs/edmmisc232add40_en.pdf. 15 Arbitration Act § 24(2) (Sri Lanka).

4

arising out of the Agreement and non-contractual claims concerning intellectual property

rights, which are closely connected to such agreement. The Malaysian laws govern both the

contractual [1] and non-contractual claims [2] relating to the Agreement.

1. The Malaysian laws govern the contractual claims arising out of the Agreement

As the present dispute is arisen out of the Agreement, the general principles of

conflict of laws which can be derived from certain international conventions, particularly

those in the field of commercial contracts shall apply to the substantive merits of the present

dispute.16 The general principles of conflict of laws in relation to the commercial contracts, as

codified in Article 4 of the Rome Convention on the Law Applicable to Contractual

Obligations17 and Article 9 of the Inter-American Convention on the Law Applicable to

International Contracts18 indicate that the contract shall be governed by the law of the country

in which it is closely connected. Although neither of these conventions has been ratified by

Sri Lanka and Singapore, the rules of conflict set out therein reflect the prevailing principles

of private international law in this particular field.19

Although the Claimant’s company is incorporated in Sri Lanka and the

Respondent’s is incorporated in Singapore,20 neither the law of Sri Lanka nor Singapore has

the closet connection to the dispute. When weighing all of the connections relating to the

Agreement, the Claimant submits that Malaysia is mostly connected to the dispute,21 as the

Agreement had been concluded in Malaysia22 and the parties agreed to distribute the

16 Case No. 6527 of 1991, 18 Y.B. Comm. Arb. 46 (ICC Int’l Ct. Arb.). 17 Rome Convention on the Law Applicable to Contractual Obligations, (originally enacted June 19, 1980) (consolidated version) 2005 O.J. (C 334) 1. 18 Organization of American States Fifth Inter-American Specialized Conference on Private International Law: Inter-American Convention on the Law Applicable to International Contracts, March 17, 1994, OEA/Ser.K/XXI.5, CIDIP-V/doc.34/94 rev. 3 corr. 2, March 17, 1994, 33 I.L.M. 732. 19 Id. 20 Moot Problem, ¶2, 7. 21 See IVANA KUNDA & CARLOS MANUEL GONÇALVES DE MELO MARINHO, PRACTICAL HANDBOOK ON EUROPEAN PRIVATE INTERNATIONAL LAW 16 (2010), available at http://ec.europa.eu/justice/civil/files/. 22 Clarifications Page. 12, Question 12.

5

products therein.23 Moreover, when considering the obligations imposed on parties, the

provisions of the Agreement generally draws reference to Malaysia, for instance, the

Distributor must not obtain any products that compete with those of the Supplier in

Malaysia.24

This is similar to the ICC Award No. 5717 in which the arbitral tribunal

observed that the Swiss law has the closet connection to the dispute because the parties had

concluded the contract which governed their relationship in Switzerland and certain

obligations of the parties regarding the payment made reference to Swiss bank account.25

The arbitral tribunal in this case concluded that “[c]ompared to these connections,

connections to any one of the other relevant jurisdictions are considerably less significant”,

which therefore makes the Swiss law applicable to the substantive merits of the dispute.26

2. The Malaysian laws govern the non-contractual claims relating to the Agreement

The non-contractual claims the parties submitted to arbitration are issues relating

to intellectual property including whether the Respondent’s use of the word ‘CEYLON’ in

respect of its tea products is misleading and whether the Respondent’s use of the ATC’s

Mark amounts to trade mark infringement.27 The prevailing conflict of law rules in matters

relating to intellectual property is lex loci protectionis or the law of the country where the

protection is claimed, as codified in European Commission Regulation On the Law

Applicable to Non-Contractual Obligations.28

Taking in account the territorial nature of intellectual property right, it can only

23 Agreement, Recitals B. 24 Agreement, Clause 4.2. 25 Case No. 5717 of 1990, 1 ICC Bull. 22 (ICC Int’l Ct. Arb.). 26 Id. 27 Moot Problem, ¶18. 28 Commission Regulation 864/2007, On the Law Applicable to Non-Contractual Obligations, 2007 O.J. (L 199) 40; SOPHIE NEUMANN, Ubiquitous and multistate cases, in RESEARCH HANDBOOK ON CROSS-BORDER

ENFORCEMENT OF INTELLECTUAL PROPERTY 497, 506 (Paul Torremans ed., 2004).

6

be infringed in a country where it is protected. Consequently, the country where the

protection is claimed is generally the place where an alleged infringement occurs.29

In this case, the Respondent’s use of the word ‘CEYLON’ and the ATC’s Mark

in relation to its tea products occurs in Malaysia, therefore; the law governing non-

contractual claims in relation to intellectual property rights is the Malaysian laws.

Therefore, the Malaysian laws govern the overall substantive merits of this

arbitration.

II. THE DISTRIBUTION OF SAILOR’S CEYLON AFFIXED WITH THE ATC’S MARK IN

MALAYSIA BREACHES THE AGREEMENT

As the Respondent entered into the Agreement with the Claimant, the Respondent

is bound by the obligations imposed by such agreement [A]. The Respondent’s distribution of

SAILOR’S CEYLON affixed with the ATC’s Mark violates the non-compete clause [B] and

the restriction on intellectual property [C] contained therein. Therefore, the Claimant is

entitled to seek for payment of damages [D].

A. The Respondent is bound by the obligations under the Agreement when it

commenced the distribution of SAILOR’S CEYLON

Once the Agreement was entered into with free consent [1], it binds the relevant

parties throughout the assented time frame30 [2].

1. The Parties entered into the Agreement with their free consent

29 WIPO Forum on Private International Law and Intellectual Property, Jan. 30-31, 2001, Private International Aspects of the Protection of Trademarks, WIPO/PIL/01/4 (Jan. 19, 2001). 30 PAMELA R. TEPPER, THE LAW OF CONTRACTS AND THE UNIFORM COMMERCIAL CODE 112 (3d ed. 2015).

7

Section 13 of the Malaysian Contracts Act 1950 provides that “[t]wo or more

persons are said to consent when they agree upon the same thing in the same sense.” Free

consent is said to be caused when it would not have been given under undue influence.31

Despite the devastation of tea plantations from which the Respondent sourced its

tealeaves, the Respondent was not on the verge of bankruptcy.32 Therefore, no undue

influence was found since the Claimant is “not in the position to dominate the will” of the

Respondent and thus cannot “use that position to obtain an unfair advantage”.33

Consequently, both Parties are willing to agree upon the Agreement with free consent.

2. The Agreement was in force throughout the assented time frame

If an agreement does not specify its effective date, it goes into effect on the date it

was signed by the person to whom the contract was offered for a signature.34 In this case, the

Agreement goes into effect on 20 October 2008 when it was signed.35

The Respondent has been distributing ‘SAILOR’S CEYLON’ in Malaysia since

November 2012.36 The Agreement defines Term as 5 years and a period of 12 months after

the commencing date,37 resulting in its expiry on 20 October 2013. Therefore, the Agreement

was still in force throughout the assented time frame.

B. The Respondent’s distribution of SAILOR’S CEYLON affixed with the ATC’s

mark in Malaysia is in breach of the non-compete clause imposed by the

Agreement

31 Contracts Act, 1950, 3, §14 (Malay.). 32 Additional Clarifications, Question 7. 33 Contracts Act 3 §16 (Malay.). 34 Michael Leo Looney, Williston: Treatise on the Law of Contracts, 1-2 B.C. L. REV. 191 (1960). 35 Moot Problem, ¶11. 36 Moot Problem, ¶14. 37 Moot Problem, ¶11.

8

Pursuant to Clause 4.2 of the Agreement, during the 5-year term of the

Agreement and for a period of 12 months after it, the Respondent must not be concerned or

interested in the manufacture or distribution in Malaysia of any goods, affixed with the Lion

Logo, the CTC CEYLON mark or any other arguably similar mark, which compete with the

CTC CEYLON of the Claimant.38 During the restricted period, the Respondent is concerned

or interested in the distribution of the SAILOR’S CEYLON in Malaysia [1] which are affixed

with the ATC’s Mark that is considered arguably similar to the Claimant’s Lion Logo [2].

Moreover, SAILOR’S CEYLON is the same type of products as CTC CEYLON [3].

Therefore, SAILOR’S CEYLON is goods that compete with the CTC CEYLON, which

renders the distribution of the former in breach of Clause 4.2 of the Agreement.

1. The Respondent is concerned or interested in the distribution of the SAILOR’S

CEYLON in Malaysia during the restricted period

Though the Respondent’s growing and manufacture of its tea has taken place in

China,39 which falls outside the restricted scope, its distribution of SAILOR’S CEYLON tea

products was found to happen in Malaysia.40 As the restricted period as prescribed in the non-

compete clause starts from 20 October 2008 to 20 October 2014 and the Respondent’s

distribution of such products was found to have started since November 2012,41 it can be

concluded that the Respondent is concerned or interested in the distribution of the SAILOR’S

CEYLON in Malaysia during the restricted period.

2. The ATC’s Mark is arguably similar to the Lion Logo

The ATC’s Mark features the lion figure as its strikingly dominant component,

which closely resembles the adoption of lion figure in the Lion Logo. Moreover, both marks

are bordered by the rounded rectangle. Therefore, the ATC’s Mark is arguably similar to the 38 Agreement, Clause 4.2. 39 Moot Problem, ¶14. 40 Id. 41 Moot Problem, ¶11, 13, 14.

9

Lion Logo.

3. SAILOR’S CEYLON is the same type of products as CTC CEYLON

In Sports Connection Pte Ltd v. Deuter Sports GmbH, the distributor was

restricted not to sell products, which are in competition with backpacks and outdoor products

under the Deuter trademark of the supplier. It was observed that the distributor’s refusal to

cease the sale of its own athletic products was in breach of the non-compete clause because

they were selling the same type of the products with its supplier.42

In this case, the Respondent’s SAILOR’S CEYLON is the same type of products

as the CTC CEYLON of the Respondent, since they are both tea products. Therefore, it can

be readily inferred that SAILOR’S CEYLON are goods that compete with the CTC

CEYLON, especially when they share the same market, as both are available in major

supermarkets and grocery stores in Malaysia.43

In conclusion, the Respondent’s distribution of SAILOR’S CEYLON affixed

with the ATC’s Mark breaches the non-compete restriction as prescribed in Clause 4.2 of the

Agreement.

C. The distribution of SAILOR’S CEYLON affixed with ATC’s mark breaches the

restrictions on intellectual property imposed by the Agreement

Clause 9.3.7 of the Agreement prescribes that “[t]he Distributor must not use in

the Territory any trade marks or trade names so resembling the Trade Marks, any trade mark

or trade names of the Supplier as to be likely to cause confusion or deception.”44

The aforementioned clause prohibits the Respondent from using any trade marks

or trade names so resembling the Claimant’s Lion Logo and CTC CEYLON as to be likely to

42 Sports Connection Pte Ltd. v. Deuter Sports GmbH, [2009] 3 S.L.R. 883. 43 Additional Clarifications, Question 23. 44 Agreement, Clause 9.3.7.

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cause confusion or deception. In this case, the Respondent’s use of its ATC’s Mark [1] and

its name SAILOR’S CEYLON [2] are so resembling the protected marks of the Claimant as

to be likely to cause confusion or deception.

1. The ATC’s Mark of the Respondent is so resembling the Lion Logo as to be likely to

cause confusion or deception

In order to determine whether marks are so resembling or not, they have to be

compared for their similarities in visual, aural and conceptual aspects.45 The determination of

similarity between two marks must be based on an overall impression, particularly their

dominant components.46 Both marks similarly feature the lion figure as the dominant

component and therefore are visually similar. Moreover, it is likely that the majority of

consumers would aurally verbalize them as the ‘Lion Logo’. There is a similar observation in

S.Tous, S.L. v. Ng Wee Ping where aural similarity is also found between two marks, both of

which were pictorial devices; one depicting a picture of a bear, and the other depicting an

outline of a bear.47 The ATC’s Mark and the Lion Logo also bear a conceptual resemblance

because they chose to feature the lion figure as the distinctive component, which are similarly

bordered by a rounded rectangle. Therefore, after comparing both marks visually, aurally and

conceptually, they possess a high degree of similarities.

The similarity of the marks is one of the factors that are critical in determining

whether there is a likelihood of confusion resulting from the use of a certain mark.48

45 Hai Tong Co (Pte.) Ltd. v. Ventree Singapore Pte. Ltd. and another appeal, [2013] 2 S.L.R. 941; Festina Lotus SA v. Romanson Co. Ltd., [2010] 4 S.L.R. 552; Staywell Hospitality Group Pty. Ltd. v. Starwood Hotels & Resorts Worldwide, Inc., [2014] 1 S.L.R. 911, cited with approval in Polo/Lauren Co. L.P. v. United States Polo Ass’n, No. 13 of 2015 (Sing. High Ct. March 8, 2016), http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/free-law/high-court-judgments/18379-polo-lauren-co-lp-v-united-states-polo-association.. 46 See Lloyd Schuhfabrik Meyer v. Klijsen Handel BV, [1999] 2 C.M.L.R. 1343. 47 S.Tous, S.L. v. Ng Wee Ping, [2010] S.G.I.P.O.S. 6. 48 Polo/Lauren Co. L.P, supra note 45.

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Moreover, the surrounding circumstances as well as the imperfect recollection of an average

consumer also play a part in such determination.49

Taking into account the imperfect recollection of average purchasers,50 it seems

highly probable that they would mistake the ATC’s Mark for the Lion Logo or they would

think that the marks are associated in the sense that the ATC’s Mark is an extension or a new

version of the Lion Logo because the two marks contain a strikingly identic dominant

features in design. Though both marks bear certain dissimilarities i.e. the lion’s features, the

shape and size of the rectangle, the inserted texts and font; there is still a substantial

likelihood of confusion among relevant group of public, as most purchasers of the tea

products would not consider every minor detail of the marks, but rather an overall impression

of them, since the price of both tea products are not high and the price range of both is very

similar.51

In conclusion, with regards to the surrounding circumstance and imperfect

recollect of an average consumer, the ATC’s Mark is nearly resembling the Lion Logo as is

likely to deceive or cause confusion.

2. SAILOR’S CEYLON is so resembling CTC CEYLON as to be likely to cause

confusion or deception

Black’s Law Dictionary defines the word ‘Trade Name’ as “[a] name which by

user and reputation has acquired the property of indicating that a certain trade or occupation

is carried on by a particular person.”52

In Coffee Partners, Inc. v. San Francisco Coffee and Roastery, Inc.,53 it is held

that SAN FRANCISCO COFFEE is confusingly similar to SAN FRANCISCO COFFEE &

49 The Pianotist Co. Ltd., (1906) xxiii R.P.C. 774. 50 Wagamama v. City Centre Restaurants, [1995] F.S.R. 713. 51 Additional Clarifications, Question 17; See Festina, 4 S.L.R. 552. 52 Replevin, Black’s Law Dictionary (10th ed. 2014).

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ROASTERY, INC. The descriptive word ‘SAN FRANCISCO COFFEE’ are precisely the

dominant features of the trade name. It is also affirmed that the likelihood of confusion is

higher in cases where the business of one corporation is the same or similar to the business of

another corporation.

In this case, due to its similarity of the descriptive word ‘CEYLON’, the

Respondent’s use of ‘SAILOR’S CEYLON’ as a trade name to indicate its tea products is

likely to confuse or deceive the public that it is ‘CTC CEYLON’. The change of the first

word which is followed by the word ‘CEYLON’ is a use with a slight variation in such a way

as to induce persons to deal with it in the belief that they are purchasing the Claimant’s tea

products.54 When both Parties are engaged in the same business of selling tea through the

same intermediaries such as wholesalers, retailers, and food and beverage establishments and

such conducts are made in the same market,55 the consuming public will be more susceptible

to confusion and deception.

In conclusion, the ATC’s Mark and the Lion Logo bear a high degree of

similarities to the Lion Logo and CTC CEYLON as to be likely to cause confusion or

deception. Therefore, the distribution of SAILOR’S CEYLON affixed with ATC’s mark

breaches the restrictions on intellectual property imposed by the Agreement.

D. The Claimant is entitled to seek for payment of damages

Due to the Respondent’s breach of Agreement, the Claimant is entitled to seek for

payment of damages to be determined by the profits of the Respondent’s sale of SAILOR’S

CEYLON in Malaysia.

53 Coffee Partners, Inc. v. San Francisco Coffee and Roastery, Inc., G.R. No. 169504 (Mar. 3, 2010) (Phil.), available at http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/169504.htm. 54 See Philips Export B.V. v. Court of Appeals, G.R. No. 96161, 206 S.C.R.A. 457 (Feb. 21, 1992) (Phil.). 55 Additional Clarifications, Question 22.

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III. THE RESPONDENT’S USE OF THE WORD ‘CEYLON’ IN RESPECT OF ITS TEA PRODUCT IS

MISLEADING

The Agreement on Trade-Related Aspects of Intellectual Property Rights (the

“TRIPS Agreement”)56 is an international agreement that sets forth minimum protection for

intellectual properties to which Malaysia, Sri Lanka and Singapore are parties. Article 22.1 of

the TRIPS Agreement provides definition of geographical indications as “indications which

identify a good as originating in the territory of a Member, or a region or locality in that

territory, where a given quality, reputation or other characteristic of the good is essentially

attributable to its geographical origin”. 57 All parties, according to Article 22.2(a), are

obligated to prevent the use of indications which “indicates or suggests that the good in

question originates in a geographical area other than the true place of origin in a manner

which misleads the public as to the geographical origin of the good”.58

Upon Malaysia’s ratification of the TRIPS Agreement, it has passed the

Geographical Indication Act 2000 which incorporates certain provisions on protection on

geographical indications as laid down in the TRIPS agreement. In the territory of Malaysia,

the word ‘Ceylon’ is geographical indication that is eligible for protection [A]. The

Respondent’s use of the word ‘CEYLON’ in respect of its tea products is misleading [B] and

thus entitles the Claimant to seek for an order to cease the use [C].

A. The word ‘Ceylon’ is geographical indication that is eligible for protection

In this case, the dispute arises upon the Respondent’s use of word ‘CEYLON,’ a

geographical indication [1] that is protected despite the lax of registration [2]. As it has

neither ceased to be protected [3] nor fallen into disuse in their country or territory of origin

56 TRIPS: Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, The Legal Texts: The Results of the Uruguay Round of Multilateral Trade Negotiations 320 (1999), 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994) [hereinafter TRIPS Agreement]. 57 Id. 58 Id.

14

[4]. Also, it is a protectable indication within the extent of application [5]. Therefore, the

word ‘Ceylon’ is a geographical indication that is eligible for protection.

1. The word ‘Ceylon’ corresponds to the meaning of ‘geographical indication’

The Malaysian Geographical Indications Act 2000 protects indications that

correspond to the meaning of ‘geographical indication’. Under Section 2 of the Act, it

provides that geographical indication is an “indication which identifies any goods as

originating in a country or territory, or a region or locality in that country or territory, where a

given quality, reputation or other characteristic of the goods is essentially attributable to their

geographical origin.” 59

Ceylon is the former name of the Republic of Sri Lanka when the island was

under British rule from 1796 to 1947. After it gained independence in 1948, Ceylon was

eventually renamed as Sri Lanka in 1972.60 Therefore, the word ‘Ceylon’ is linked solely to

Sri Lanka.

As ‘Ceylon’ is related to Sri Lanka by history, the use of the word ‘Ceylon’ as a

part of a brand name implies that such tea products originate specifically from Sri Lanka,

where a given quality, reputation and other characteristics of Ceylon tea meets the

requirements set out by the SLTB, which is essentially attributable to the Republic of Sri

Lanka.61 Therefore, ‘Ceylon’ corresponds to the meaning of geographical indication.

2. The protection is granted despite no registration as geographical indication in Malaysia

59 Geographical Indications Act, 2000, 2, §2 (Malay.). 60 U.S. CENT. INTELLIGENCE AGENCY, The World Factbook: Sri Lanka, https://www.cia.gov/library/publications/the-world-factbook/geos/ce.html (last visited July 13, 2016). 61 Worldwide Symposium on Geographical Indications, Bangkok, Thai., Mar. 27-29, 2013, WIPO/GEO/BKK/13/INF/4 (Jan. 15, 2014).

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Under Section 3(a) of the Malaysian Geographical Indications Act, it provides

that geographical indication shall be protected “regardless whether or not the geographical

indication is registered under this Act”.62

In this case, the word ‘Ceylon’ is a non-registered geographical indication in

Malaysia; however, it is still protected within Malaysia despite the lax of registration under

the Act.

3. The word ‘Ceylon’ is or has not ceased to be protected in its country or territory of

origin

Under Section 4(c) of the Malaysian Geographical Indications Act, it provides

that geographical indications will be excluded from protection under Section 3 if they “are

not or have ceased to be protected in their country or territory of origin”.63 When Section 101

and Section 142(7) of the Sri Lankan Intellectual Property Act64 are read together, it is clearly

stated that Sri Lanka grants protection for certification mark in any case of infringement

brought to proceedings by the owner of the registered mark.

In this case, Sri Lanka has established the SLTB to implement relevant

regulations related to the industry.65 With the adoption of the Certification Marks System,

Ceylon Tea has already been registered as a certification mark by SLTB.66 Therefore, the use

of the word ‘Ceylon’ in respect of tea products is and has not ceased to be protected in Sri

Lanka.

4. The word ‘Ceylon’ has not fallen into disuse in their country or territory of origin

62 Geographical Indications Act 2 §3(a) (Malay.). 63 Geographical Indications Act 2 §4(c) (Malay.). 64 Intellectual Property Act, 2003, §101, 142(7) (Sri Lanka). 65 Moot Problem, ¶1. 66 L.M. De Silva, Geographical Indications- Need of a Registration System for Sri Lanka, in Proceedings of 8th International Research Conference; Law 43, 45 (C.L. Goonasekara et al. eds., 2015).

16

Under Section 4(d) of the Malaysian Geographical Indications Act, it provides

that protection will not expand to the geographical indications which “have fallen into disuse

in their country or territory of origin”.67

In the current case, there is still a continuous use of the word ‘Ceylon’ in Sri

Lanka such as “Bank of Ceylon” and “Ceylon Fisheries Corporation”, especially for specific

trade purpose, the Ceylon Tea label.68 Therefore, the word ‘Ceylon’ has not fallen into disuse

in Sri Lanka.

When Section 3(a) and Section 4 of the Malaysian Geographical Indications Act

are read together, registration is not mandatory for an indication to be protected in Malaysia,

so ‘Ceylon’ is protected despite the lax of registration. With no other criteria of exclusion

from protection is met, protection is granted.

5. The word ‘Ceylon’ is a within the extent of protection

Section 27(1) of the Malaysian Geographical Indications Act gives the extent of

application of this Act that it would apply to a protectable geographical indication in

existence before the commencement of this Act.69

In this case, Sri Lanka has long been recognized as Ceylon.70 The Malaysian

Geographical Indications Act has been implemented since 2000 which makes ‘Ceylon’ a

protectable geographical indication in existence before the commencement of the Act. This

concludes that the protection of the word ‘CEYLON’ is within the extent of application.

B. The use of the word ‘Ceylon’ in relation to the Respondent’s tea business is

misleading

67 Geographical Indications Act 2 §4(d) (Malay.). 68 Charles Haviland, Sri Lanka erases colonial name, Ceylon, BBC NEWS, Jan. 1, 2011, http://www.bbc.com/news/world-south-asia-12099596 69 Geographical Indications Act 2 §27(1) (Malay.). 70 U.S. CENT. INTELLIGENCE AGENCY, supra note 60.

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The use of a geographical indication is misleading since it is untrue [1] that it

misleads the public as to geographical origin and the standard of the goods [2].

1. The Respondent’s use of the word ‘Ceylon’ in respect of its tea product is untrue

In Bollinger v. Costa Brava Wine Co. Ltd., the phrase “Spanish Champagne” is

used in respect of sparkling wine products that do not originate from Champagne, a region in

France, the Court thus ruled that the defendant’s description of its products “contains an

untruthful statement that a wine which is not Champagne is Champagne”. 71

In this case, the tea was grown and manufactured in Fujian province, China,72 but

distributed under the brand name SAILOR’S CEYLON.73 Though the seeds are sourced from

Sri Lanka,74 the tea was not grown and manufactured in Sri Lanka.

Apart from having to use tea seeds that are sourced exclusively from Sri Lanka,

Ceylon tea producers who would be eligible to use the word ‘Ceylon’ to describe their tea

must be in a particular area and specific climatic conditions that can only be found in Sri

Lanka and not elsewhere; therefore, the Respondent’s use of the word ‘Ceylon’ in respect of

its tea product is untrue.

2. Such use of indication misleads the public as to geographical origin and standard of the

goods

The use of untrue geographical indication misleads the consuming public as to

the geographical origin [i], as well as the standard of the goods [ii].

i. Geographical origin of the goods is misled

71 Bollinger v. Costa Brava Wine Co. Ltd., [1961] 1 W.L.R. 271. 72 Additional Clarifications, Question 12. 73 Moot Problem, ¶14. 74 Clarifications, Question 5.

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In a Malaysian case, Maestro Swiss Chocolate Sdn. Bhd. & 3 Ors v Chocosuisse

Union Des Fabricants Suisses De Chocolate & 2 Ors & Another Appeal,75 there had been a

use of “Maestro Swiss” on the front part of the packaging of chocolates produced in Penang,

Malaysia, which in reality had no Swiss origin nor connection. The Federal Court of

Malaysia agreed with the Court of Appeal that

so as to the balance of probability shows a conscious use of "Maestro Swiss" on the front part of the packaging so as to give the impression of a link with Switzerland or a Swiss company' and that the ‘use of the device "Maestro Swiss" in the circumstances of this case was not a bona fide use of the Respondents' corporate name and/or logo.

The Court finally held that the people of Malaysia perceived “Swiss chocolate” as

an indication of chocolate originated from Switzerland which means it is “manufactured

entirely in Switzerland.”

In this case, though the Respondent has been in the business of manufacturing

and distributing tea since 199976 with the existing sources in Malaysia and China,77 it has

never once used the word ‘Ceylon’ to describe its tea products until 2008, 78 the same year it

entered into the Agreement with the Claimant. Considering all relevant facts, it is clear that

such use had not been made in good faith.

Moreover, only tea sourced, grown and manufactured entirely in Sri Lanka is

entitled to use the word ‘Ceylon’. Therefore, distributing tea grown in China under the brand

name SAILOR’S CEYLON misleads the public that it originates from Sri Lanka.

75 Maestro Swiss Chocolate Sdn. Bhd. v. Chocosuisse Union Des Fabricants Suisses De Chocolate & Another Appeal, No. 02(f)–97–12/2012(W); 02(f)–42–04/2014(W) (Fed. Ct. of Malay. Feb. 3, 2016), http://www.kehakiman.gov.my/directory/judgment/file/02(f)-97-12-2012(W)_laterst23feb2016.pdf. 76 Clarifications, Question 17. 77 Additional Clarifications, Question 2. 78 Additional Clarifications, Question 5.

19

Furthermore, even all information is accurately presented, country of origin of the

tea leaves is stated on the packaging in fine print.79 In this respect, even though China is

printed on all ATC packaging as country of origin, the overall impression is still

misleading.80

ii. Standard and quality of the goods are misled

Under the French Appellation d'Origine Contrôlée system, identifying the origin

of the products by relying wholly on factually correct geographic provenance is inadequate. It

is necessary that “certain codified guidelines for the production” has to be followed.81 This

idea is subsequently adopted through parts of the world. For instance, China’s Pinggu Peach

is registered a geographical indication not only because it originates from Pinggu district of

China, terroir of the region is also a factor.82

In this case, the word ‘Ceylon’ denotes exclusively tea grows and manufactures

in Sri Lanka. Therefore, it is appropriate to distinguish tea from that area with specific

conditions as ‘Ceylon’. Consequently, the Respondent’s use of the indication in respect of its

tea product, where such products are de facto tea grown and manufactured in China, misleads

the public that a tea which is not Ceylon is Ceylon. In conclusion, it misleads the quality,

reputation, and characteristic of Ceylon tea which are attributable to its origin.

C. The Claimant has right to seek for reliefs

79 Additional Clarification Page.4, Question 19. 80 Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20 (7 March 2012), http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCAFC/2012/20.html?stem=0&synonyms=0&query=full%20federal%20court%20optus%20commission%202012. 81 IRENE CALBOLI & DANIEL GERVAIS, SOCIO-ECONOMIC ASPECTS OF GEOGRAPHICAL INDICATIONS 4 (2015). 82 WORLD INTELLECTUAL PROPERTY ORGANIZATION, Geographical Indications from Darjeeling to Doha, WIPO MAGAZINE, Aug. 2007, at 8.

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Pursuant to Section 5 of the Malaysian Geographical Indications Act, the use of

an indication “in a manner which misleads the public as to the geographical origin of the

goods” or “that the goods in question originate in a geographical area other than the true

place of origin”83 authorizes the Court to “grant an injunction to prevent any unlawful use of

the geographical indication and award any damages and any other legal remedy or relief as it

deems fit”.

Due to the establishment of a claim based on Section 5 of GIA for unlawful use

of a geographical indication, the Claimant is entitled to seek for an order that ‘Ceylon Tea’

can be used to refer only tea grown and manufactured entirely in Sri Lanka, an injunction to

prevent any unlawful use of the word ‘Ceylon’ in relation with tea that does not originate

from Sri Lanka, an order directing ATC to discontinue the sale of its products described as

‘Ceylon tea’ and recall all such products from the market.

IV. THE RESPONDENT’S USE OF THE ATC’S MARK CONSTITUTES A TRADE MARK

INFRINGEMENT AND/OR PASSING OFF

The Respondent’s use of the ATC’s Mark that is affixed on its SAILOR’S

CEYLON tea products amounts to a trade mark infringement [A] and passing off [B] under

the Malaysian law. Therefore, the Claimant is entitled to seek for cessation of the

Respondent’s use of the ATC’s Mark [C].

A. The Respondent’s use of the ATC’s Mark amounts to a trade mark infringement

under the Malaysian Trade Marks Act

To establish a minimum standard of trade mark protection, Article 16 of the

TRIPS Agreement provides that the owner of the registered trade mark has right to prevent

83 Geographical Indications Act 2 §5 (Malay.).

21

the use identical or similar mark to the registered mark for identical or similar goods in the

course of trade if such use is likely to cause confusion.84 Malaysia has incorporated such

provision in its Trade Marks Act 1976 as amended in 2002. For a certain act to constitute a

trade mark infringement under Article 38(1)(a) of the Malaysian Trade Marks Act, the

following elements need to be satisfied: the respondent is neither the registered proprietor nor

the registered user of the trademark [1], the respondent used a mark which is identical with or

so nearly resembling the plaintiff’s registered trademark as is likely to deceive or cause

confusion [2], the respondent was using the offending mark in the course of trade [3], the

respondent was using the offending mark in relation to goods or service within the scope of

the registration [4], the respondent used the offending mark in such a manner as to render use

likely to be taken either as being used as a trademark or as importing a reference to the

registered proprietor or the registered user or to their goods or services [5].85

1. The Respondent is neither the registered proprietor nor the registered user of the Lion

Logo

As prescribed in Clause 9.1 of the Agreement, the Claimant had authorized the

Respondent to use the Lion Logo in Malaysia for the sole purpose of excising the latter’s

rights and performing its obligation under such agreement;86 however, such authorization

does not make the Respondent become a registered user nor a registered proprietor of the

Lion Logo under Section 38(1)(a) of the Malaysia Trade Marks Act. Moreover, there is no

indication pointing that the Respondent did take any further action in registering the Lion

Logo in Malaysia. Therefore, the Respondent is neither the registered proprietor nor the

registered user of the Lion Logo.

84 TRIPS Agreement, supra note 56, article 16. 85 Trade Marks Act, 1976, §38 (Malay.); Fabrique Ebel Societe Anoynme v. Syarikat Perniagaan Tukang Jam City Port, [1988] 1 M.L.J. 188, 191. 86 Agreement, Clause 9.1.

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2. The ATC’s Mark is so nearly resembling the registered Lion Logo as is likely to

deceive or cause confusion

The ATC’s Mark and the Lion Logo possess a high degree of visual, aural and

conceptual similarities to the extent that the use of it is likely to cause confusion and

deception among public as elaborated earlier.87 Therefore, the Respondent’s use of ATC’s

Mark is so nearly resembling the registered Lion Logo as is likely to deceive or cause

confusion, which fulfills the second element of a trade mark infringement.

3. The Respondent is using the ATC’s Mark in the course of trade

Section 3 of the Malaysian Trade Marks Act prescribes that “in the course of

trade means in relation to the provision of services, means in the course of business”.88 The

Respondent has been using the ATC’s Mark in the course of its business, as it has been

manufacturing and distributing its ‘SAILOR’S CEYLON’ with the ATC’s Mark affixed onto

the packaging in Malaysia and many other countries since 2012.89 Therefore, the Respondent

was using the ATC’s Mark in the course of trade.

4. The Respondent is using the ATC’s Mark in relation to goods within the registered

mark’s scope of registration

The product which is falling under the scope of registered Lion Logo is “tea

products”.90 In this case, the Respondent was using its ATC’s Mark on its tea products,

therefore; the Respondent was using the offending ATC’s Mark in relation to goods within

the registered mark’s scope of registration.91

87 See supra p. 9-11. 88 Trade Marks Act §3 (Malay.) 89 Moot Problem, ¶14. 90 Moot Problem, ¶4,5. 91 Moot Problem, ¶14.

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5. The Respondent is using the ATC’s Mark in such a manner as to render the use likely

to betaken as being used as a trade mark

In order to establish trade mark infringement, the last element is that the

Respondent must be using the offending mark as a trade mark, which means that its use must

aim to identify and guarantee the trade origin of its tea products.92 In Arsenal Football Club

plc v. Matthew Reed, the European Court of Justice observed that the defendant’s use of the

mark ‘Arsenal’ on its clothing in the context of sales to consumers was obviously not

intended for purely descriptive purposes and is rendered a trade mark use.93

As the Respondent affixed its ATC’s Mark on the packaging of its tea products

that were marketed in Malaysia and many other countries,94 the Respondent was evidently

using the ATC’s Mark to serve such purpose. Therefore, it can be concluded that the ATC’s

Mark was used in such a manner as to render the use likely to be taken as a trade mark. In

conclusion, the Respondent’s use of the ATC’s mark constitutes a trade mark infringement

under the Malaysian trade mark law.

B. The Respondent’s use of the ATC’s Mark constitutes extended passing off

Passing off is a common law tort based upon the premise that business goodwill

must be protected, which particularly means that no trader has any right to represent his

goods or services as if they had originated from another trader.95 However, there is a variant

of the a classic passing off action known as “extended passing off” action, which can be

brought by traders who share collective goodwill of the trade mark.96 As “protection is given

to a name or word that had come to mean a particular product rather than a product from a 92 Regina v. Johnstone, [2003] 1 W.L.R. 1736. 93 Case C-206/01, Arsenal Football Club Plc. v Matthew Reed, 2002 E.C.R I-10273, cited with approval in Regina v. Johnstone, [2003] 1 W.L.R. 1736. 94 Moot Problem, ¶14; Additional Clarifications, Question 9. 95 IDA MADIEHA BT ABDUL GHANI AZMI, TRADE MARKS LAW IN MALAYSIA CASES AND COMMENTARY 401 (2006); Perry v. Truefitt, (1842) 49 ER 749, 752. 96 L. BENTLY & B. SHERMAN, INTELLECTUAL PROPERTY LAW 878 (4th ed. 2014).

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particular trader”,97 in order to establish the action of extended passing off, it is incumbent

upon the Claimant to prove that it has acquired sufficient collective goodwill in the mark or

name that is distinctive to a class of goods which bear a particular quality [1]; a

misrepresentation by the Respondent to the public leads or is likely to lead the public to

believe that such goods or services correspond with that certain quality [2]; and the damage

has been caused or likely to be caused to the Claimant’s business goodwill as a result of the

Respondent’s misrepresentation [3].

1. The Claimant has acquired sufficient collective goodwill in the Lion Logo

Extended passing off acknowledges that a group of traders may share goodwill in

a certain name, mark or indicia that is distinctive of a specific class of goods.98 To establish

collective goodwill, the name or the mark in question, which a considerable amount of the

public believes that it denotes a distinctive class of goods, has “a pulling power” that attracts

customers.99

The Lion Logo is a quality symbol registered worldwide which signifies that such

tea products are entirely grown and manufactured in Sri Lanka and reach the quality

standards set by the SLTB.100 Consequently, tea products that are affixed with the Lion Logo

are endowed with recognizable qualities which distinguish them from other tea products. The

Claimant’s CTC CEYLON is affixed with the Lion Logo on its packaging, as the Claimant is

the registered user of the Lion Logo in Malaysia.101 The sales record of CTC CEYLON is

very positive to the extent that the total profits from the sales of CTC CEYLON in Malaysia

made up approximately 35% of the global net revenue of CTC in 2012, exceeding the

97 Chocosuisse v Cadbury, [1998] R.P.C. 117, 125. 98 BENTLY & SHERMAN, supra note 96. 99 Fage UK Ltd. & Anor v. Chobani UK Ltd. & Anor, [2013] E.W.H.C. 630 (Ch). 100 Moot Problem, ¶4. 101 Moot Problem, ¶4-5.

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targets.102 Therefore, the circumstances indicate that the Claimant has acquired a sufficient

collective goodwill in the Lion Logo in Malaysia.

2. The Respondent has represented its tea products as if they had complied with the

standards of the SLTB

In extended passing off, the misrepresentation lies in a way, which will lead a

number of the public to believe that those goods bear “some attribute or tributes” which they

do not actually do.103 The Lion Logo denotes that teas are originated from Sri Lanka and their

quality complies with the standard set by the SLTB. 104 Since the ATC’s Mark nearly

resembles the Claimant’s Lion Logo to the extent that is likely to deceive or cause confusion

as elaborated earlier, 105 the Respondent has misrepresented its tea products as if the

Respondent’s products were of the qualities approved by the SLTB.

3. The damage is likely to be caused as a result of the Respondent’s misrepresentation

If certain products are in direct competition with one another, the damage to the

plaintiffs' goodwill through loss of sales can be inferred.106 As both of the Respondent’s

SAILOR’S CEYLON and the Claimant’s CTC CEYLON are marketed in major

supermarkets and grocery stores in Malaysia,107 they share the same market. In this case, it

can be concluded that the products of the Claimant are in direct competition with those of the

Respondent,108 as they share the same group of customers. Therefore, the Claimant is likely

to suffer damage as a result of the Respondent’s misrepresentation.

102 Moot Problem, ¶13. 103 Chocosuisse v. Cadbury, [1998] R.P.C. 117, 837. 104 Moot Problem, ¶4. 105 See supra p. 9-11. 106 Sinma Medical Products (M) Sdn. Bhd. v. Yomeishu Seizo Co. Ltd., [2004] 3 C.L.J. 815. 107 Additional Clarifications, Question 13. 108 Moot Problem, ¶14.

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C. The Claimant is entitled to seek for cessation of the Respondent’s use of the ATC’s

Mark

The Respondent’s use of the ATC’s Mark constitutes a trade mark infringement

and passing off action. Therefore, the Claimant is entitled to the cessation of the

Respondent’s use of the ATC’s Mark or any other mark containing a lion device.109

109 St. John Ambulans Malaysia v. PJ Uniform Sdn. Bhd., [2014] 1 L.N.S. 1534.

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PRAYER FOR RELIEF

For the foregoing reasons, the Claimant respectfully requests the arbitral tribunal

to grant the following orders:

I. The Respondent must pay damages to be determined by its profits made by the sale of

SAILOR’S CEYLON in Malaysia;

II. The Respondent can only refer to tea grown and manufactured entirely in Sri Lanka

as ‘Ceylon Tea’;

III. The Respondent must 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; and

IV. The Respondent must discontinue the sale of its products described as ‘Ceylon tea’

and recall all such products from the market.

Respectfully Submitted,

Counsel for the Claimant