PUTRAJAYA (April 14): The Court of Appeal has unanimously affirmed the finding of the High Court, which had ruled that the High Court did not have the power to set aside a decision made by the World Intellectual Property Organization (WIPO), in a dispute involving TC Pharmaceutical Industries Co Ltd (TCP) and its joint-venture (JV) company in China, Red Bull Vitamin Drink Co Ltd, over the use of the “Red Bull” domain name in China.
In its decision, sighted by The Edge, a three-judge appellate bench, led by Datuk Ahmad Fairuz Zainol Abidin and flanked by Federal Court judge Datuk Mohd Nazlan Mohd Ghazali (sitting in the COA for this case) and Datuk Dr Lim Hock Leng, has ruled that the finding of the High Court, that it lacked jurisdiction to adjudicate the challenge brought by Red Bull Vitamin Drink, is correct.
Red Bull Vitamin Drink had taken a civil suit against TCP in the Malaysian courts to dispute a decision by WIPO in 2021, which had ordered that the “Red Bull” domain name used by Red Bull Vitamin Drink be returned to TCP, a registered company in Thailand.
The COA judges surmised that the High Court lacks jurisdiction to set aside the WIPO decision under the Courts of Judicature Act (CJA).
They also held that a private agreement between contracting parties cannot override the express provisions of Article 121 of the Federal Constitution or Sections 23 and 24 of the CJA.
“Jurisdiction must be conferred by federal law. Private parties cannot by agreement confer jurisdiction on courts,” the judgment read.
The judges ruled thus because all material facts occurred outside of Malaysia as the 50-year agreement between both parties was made in China, Red Bull’s operations were in China, the domain names were registered in China and the WIPO proceedings, decision and initial complaint were held in Switzerland.
“We note from the evidence that the Appellants (Red Bull) have admitted they conduct no business or trade in Malaysia, have never used the Red Bull trademarks in Malaysia and the domain names were registered in China. All relevant facts occurred outside Malaysia — in China, Switzerland, or the British Virgin Islands,” the judges said.
The judges also disagreed with Red Bull’s contention that TCP has a "place of business" in Malaysia because its Red Bull products are sold here and it sponsors events in Malaysia.
“We have considered the Respondent's (TCP’s) submission on this issue and find it persuasive. The Respondent is a Thai company headquartered in Thailand.
“The evidence shows its products are distributed in Malaysia by an independent Malaysian company, All Excel Trading Sdn Bhd. The Respondent has no office, no registered office and no business office in Malaysia.
“The mere fact that a foreign company's products are sold in Malaysia by a local distributor does not mean the foreign company has a ‘place of business’ in Malaysia,” the judgment dated April 13 read.
The judges surmised that a "place of business" is not limited to a "registered office". And they did not hold that having products distributed by a third party constitutes a "place of business".
Thus, the judges said that Section 23(1) of the CJA was not satisfied by the appellants.
The section states:
The High Court shall have jurisdiction to try all civil proceedings where:
- the cause of action arose;
- the defendant or one of several defendants resides or has his place of business;
- the facts on which the proceedings are based exist or are alleged to have occurred, or
- any land the ownership of which is disputed is situated within the local jurisdiction of the Court.
The judges said that all four limbs above were not satisfied by Red Bull.
The judges also stated that they agree with TCP’s lawyers’ arguments that the purported cause of action for "unlawful interference with trade" was a smoke screen.
“The purported cause for action is merely a vehicle — a Trojan horse, to use the Respondent's (TCP) apt metaphor — to smuggle in what is in substance an appeal against the WIPO decision,” the judgment read.
The judges thus upheld the High Court’s decision which said that Red Bull had abused the legal process.
“For all the above reasons, we affirm the learned Judicial Commissioner's finding that the Appellants committed the tort of abuse of legal process,” the judgment said.
The appeal was then dismissed with costs. The judges ordered Red Bull to pay TCP RM80,000 in costs of the appeal.
In his decision on Sept 26, 2023, Judicial Commissioner Azlan Sulaiman had said that the court did not have the jurisdiction to make a ruling on the WIPO decision and, even if it did, the court should not grant the relief sought by Red Bull Vitamin Drink.
The judicial commissioner then surmised that even if the court did have the jurisdiction to hear and adjudicate Red Bull Vitamin Drink’s challenge against WIPO’s decision, it should not grant the setting aside of the decision.
He also said that TCP’s act of bringing the action to protect its legal rights is not interfering with trade as alleged by Red Bull Vitamin Drink.
Azlan also found that based on a counterclaim by TCP, the action filed by Red Bull Vitamin Drink was an abuse of the court process.
Red Bull Vitamin Drink’s action was dismissed with costs. The judicial commissioner ordered Red Bull Vitamin Drink to make a declaration that in filing the application, it had committed an abuse of the court process.
Red Bull Vitamin Drink was ordered to pay general damages of RM200,000 for the abuse.
It was further ordered to pay exemplary damages of RM300,000 to TCP for abuse of the court process and slapped with another order that it pay costs of RM100,000 to TCP subject to the allocator.
The Court of Appeal also upheld the payment of general damages awarded by the High Court.
Lawyers Linda Wang Chaw Ling and Joyce Goh Min Yen from Messrs Linda Wang Su & Boo represented Red Bull while Ng Pau Chze from Messrs PC Kok & Co acted for TCP.