Ahmad Maarop JCA:

Brief Facts Of The Case

[1] This appeal concerns the rights to produce, distribute and sell in Malaysia the soft drinks - Kickapoo. The brief facts relevant to this appeal are these. Pursuant to a licence agreement dated 9 January 1996 (the RL agreement), the Monarch Company, Inc (TMCI), of 1100 Johnson Ferry Road, N.E Suite 460, Georgia 30342, the United States of America, as the owner of the trade marks "Kickapoo", and certain designs all for use in connection with the finished beverages, bases and concentrates, granted an exclusive licence to the respondent to prepare, sell and distribute in bottles and cans the finished beverages (the said beverages) in Malaysia and Singapore. Under the RL agreement, the respondent did not acquire any rights to the Kickapoo trade mark except the right to use in accordance with the agreement, and that all use thereof by the respondent shall enure to the benefit of TMCI. With effect from 9 July 1985, TMCI was registered under the Malaysian Trade Marks Act 1976 as the proprietor of the trade mark relating to the said beverages. An essential ingredient of the said beverages was the base concentrate which, under the RL agreement was supplied by TMCI. In fact the RL agreement provides that the exclusive rights granted under the agreement shall continue so long as TMCI continues to make available the beverage bases to the respondent. The RL agreement also provides that the respondent shall use only the confidential formula beverage bases obtained from TMCI or TMCI's approved sources, in the processing and manufacture of the said beverages.

[2] TMCI was a company established more than 20 years ago to obtain a trade mark on soft drinks in the United States, Canada and other countries. Later, to manage its interests outside the United States and Canada including the giving of licences to manufacture and sell its soft drinks which include Kickapoo and Kickapoo joy juice, TMCI established Monarch International (MI). On 31 December 1998, TMCI, MI, the Latin American Specialtry Beverages, LLC, a Delaware Limited Liability Company, Monarch of Atlanta International Ltd and the beneficial and record owners of all classes of capital stocks or membership interests, as the case may be, of the companies, as set forth on sch. A to the agreement, executed stock and Asset Acquisition Agreement (the SAA agreement) whereby all the international assets, including licence agreements and trade marks outside the United States and Canada were purchased by Monarch of Atlanta International Ltd (MAIL). On 8 February 1999, Amistar Investment Limited (AIL), which was a new name for MAIL, agreed to acquire all the said international assets. Consequently, on 12 February 1999 an amendment was made to the SAA agreement whereby one of the terms provided thereunder was that the purchaser's name was changed from MAIL to AIL. On the same date (12 February 1999) TMCI and the other companies (which had executed the SAA agreement), entered into an assignment of assets agreement (the assignment agreement), whereby all the rights, titles and interests in the international assets provided in the said agreement were transferred, conveyed and assigned to AIL. On 22 June 2004, AIL changed its name to TMBCE. To complete the narration of the factual background of this appeal, mention must also be made of another company - Monarch Beverage Company, Incorporated (TMBCI). TMBCI was a company established in the United States on 15 December 2000 for the purpose of acquiring the international assets of TMCI including licence agreements and trade marks in the United States and Canada. Then there was Monarch Beverages of Atlanta Incorporated (MBA) which was also established in the United States and was a wholly owned subsidiary of TMBCI. MBA was responsible for dealing with the orders and deliveries of concentrates and syrups (for the manufacture of soft drinks) to TMBCE's clients. That responsibility was undertaken by MBA o