ALSA University of Malaya Symposium 2016: Arbitration Practice

Attachment A
Objectives:
1. To expose students to real life legal disputes and to experience the working of arbitration as
an alternative dispute resolution.
2. To train the students to think critically and utilize meticulous application in both
application of law in argument and oral presentation.

Rules and Regulations:

1. In this practice session, there is no strict rules to be followed as in the procedures and order
of presentation. However, counsels for both Claimant and Respondent have to first agree
on the Order of Presentation.
2. Each university is required to send up to ONE team. A team is composed of at least four
students.
3. Two members shall act for Claimant and another two shall act for Respondent.
4. Each team will have to present their argument during the practice.
5. The duration of the whole oral presentation is forty minutes. Another five minutes are
allocated for rebuttals for both teams. It is advisable to divide the time evenly.
6. An arbitrator will preside during the practice.
7. No memorial submission is required in this practice. However, participants may prepare an
individual script for the oral submission.

This moot problem is amended with consent of the Novice Arbitration Mooting
Competition 2015.

Arbitration Moot Question

McDonagh vs McD
1. McDonagh is a household name in Malaysia. It is a fast food chain that has had
humble beginnings. Starting off in January 1988 as a family-owned and operated
eatery, McDonaghs is now a multi-national, publicly owned chain conglomerate.
2. McDonaghs first foray into the international market only came about recently, in
2012. To-date, McDonagh has an international presence (aside from Malaysia) in
Singapore, Indonesia, Thailand, and most recently in London, England.
3. McDonaghs sells quick-fry fast food. Its signature dishes are its famous McDonagh
Burgers and McDonagh Hotdogs. In fact, every product offered up by McDonagh
carries its name (examples including McDonagh Soda and McDonagh Fries).
4. In 1998, just before McDonagh became a publicly-listed corporation, Tan Sri Thomas
MacDonagh opted to trademark the name McDonagh.
5. McDonaghs business utilises a franchise type model of business, wherein franchisees
have to agree to pay a percentage of their profits to the Malaysian-based Corporation
every year. All franchise agreements both national and international are drafted and
executed in Malaysia with the applicable law being Malaysian law. Tan Sri Thomas
MacDonagh is a proud patriot. He ensured that all the members of the board of
directors are Malaysian citizens and had only opened the companys shareholding to
Malaysian citizens.
6. As the brand has been in Malaysia from 1988, many Malaysians opt to abbreviate
McDonaghs food products as McD. McDonaghs board of directors and
shareholders are aware of the abbreviated form (McD) utilised by Malaysians.
However, McDonagh has not registered McD as a trademark of McDonagh.
7. In January 2006, a small eatery is opened by Mr and Mrs Phil McDonahue in Central
London. The stall is called McD. Mr and Mrs McDonahue are domiciled in London.
Both of them had intended to utilise the strength of their currency and maximise their
investment. Since there are a lot of eateries in London, they had made the decision to
This moot problem is amended with consent of the Novice Arbitration Mooting
Competition 2015.

set up a second outlet abroad and after a quick research found Malaysia to be quite an
ideal market to penetrate as it is still a fast growing economy. Albeit a small eatery, Mr
and Mrs McDonahue had incorporated a small company in London by the name of
McDonahue Incorporated (McDonahue Inc) which is a private company limited by
shares. McDonahue Inc then had entered into a franchise agreement with one of the
prospective franchisees in Malaysia to operate the McD franchise in Malaysia. The
franchise agreement was a standard franchise agreement which expressly stipulates
that the applicable law is to be the law of England. Since Mr and Mrs McDonahue are
both domiciled in London, the franchise agreement was executed in their Kensington
Borough home in London. The agreement also stipulates that the franchisee shall pay
a percentage of their profits to McDonahue Inc in pound sterling. Remuneration of
their employees shall also be paid in pound sterling.
8. All of McDs products carry the term McD before them (e.g., McD Burger, McD
Shake). When McD first started its operation, McDonagh was unaware as to its
(McDs) existence. In January 2007, McD trademarked the name McD in England.
Business picked up relatively quickly and in May 2014, McD managed to open its
first Malaysian franchise in Petaling Jaya.
9. In June 2014, Tan Sri Thomas MacDonagh opened the Business Times and was
shocked to see an advertisement published calling for Malaysians to come McDs new
Malaysian outlet. He called for a board meeting and the issue was extensively
discussed by McDonaghs directors.
10. As the directors were discussing the matter, they received a letter addressed to
McDonaghs board of directors. The letter was sent by McDs solicitors to McDonagh,
demanding that McDonagh cease usage of the term McD in all their advertising in
Malaysia and in London as the same has been trademark in England.
11. McD further stated that unless they receive McDonaghs directors written
confirmation (within 1 week) that they will cease usage of the term McD , they
This moot problem is amended with consent of the Novice Arbitration Mooting
Competition 2015.

(McD) would have no choice but to initiate legal action to protect their trademarked
name.
12. McDonaghs directors were shocked. They immediately instructed their solicitors to
write back to McD, stating that the name McD is a trademark that belongs to
McDonagh and although it was unregistered as a trademark, it does not defeat their
rights over the established trademark. They demanded that McD stop using the term in
their business both in England and Malaysia with immediate effect.
13. Upon receiving McDonaghs letter, Mr and Mrs Phil McDonahue decided to initiate a
legal suit against McDonagh.
14. However, before any action was initiated against McDonagh by McD, McDonaghs
solicitors sent a letter to McDs solicitors asking if their client would be agreeable to
arbitration.
15. McD is agreeable to arbitration as arbitral proceedings will keep the entire matter out
of the public eye. McDonagh suggested that the seat of arbitration should be in
Malaysia following the KLRCA Rules. McD in turn was agreeable to the seat of
arbitration and theutilisation of the KLRCA Rules but insisted that the applicable law
in the dispute should be the law of the United Kingdom.
16. McDonagh disagreed to this, arguing adamantly that the applicable law should be
Malaysian Law. Nonetheless, the parties have agreed to first, delve into the
appointment of arbitrators before disputing such substantive issue on the applicable
law for the sake of convenience and smooth conduct of the arbitration.
17. McD is the claimant and McDonagh is the respondent. The Director of KLRCA had
requested the Presiding arbitrator to confer with the other two arbitrators to submit a
Hearing Agenda for hearing. The Hearing Agenda submitted is as follows:
1. What is the applicable law in determining this dispute?
2. Which of the parties is the rightful owner of the McD trademark (if any)?

This moot problem is amended with consent of the Novice Arbitration Mooting
Competition 2015.

Instructions:
1. Counsels for the Claimant (McD) are to submit that:
a. The applicable law in determining this dispute should be the law of United
Kingdom.
b. McD is the rightful owner of the McD trademark.
2. Counsels for the Respondent (McDonagh) are to submit that:
a. The applicable law in determining this dispute should be the law of Malaysia.
b. McDonagh is the rightful owner of the McD trademark.

References
Statutes
1. Malaysias Arbitration Act 2005

Section 30(2)
Section 30(4)

2. Trade Marks Act(Act 175) 1976

Section 20(2)
Section 70B

This moot problem is amended with consent of the Novice Arbitration Mooting
Competition 2015.

3. Trade Marks Act UK 1994

Section 1
Section 9(1)

4. KLRCA Arbitration Rules

Article 35

Cases
1. YK Fung Securities SdnBhd v James Cape (Far East) Ltd (CA) [1997] 4 CLJ 300
2. Lim Yew Sing v Hummel International Sports & Leisure [1996] 3 MLJ 7
3. United Biscuits (UK) Ltd v Asda Stores Ltd [1997] R.P.C. 513
4. Reckitt & Colman Prodcuts Ltd v Borden Inc [1990] 1 All. E. R. 873
5. McCurry Restaurant (KL) SdnBhd v McDonalds Corporation [2009] 3 CLJ 540
6. Goh SuanHee v Teo Cher Teck [2009] SGCA 52
7. Siegert v Findlater(1878) 7 Ch D. 801 (Fry J.)

This moot problem is amended with consent of the Novice Arbitration Mooting
Competition 2015.