GNC clears appeal hurdle in $24m dispute over 54 LAC stores

Judges restored lease-related orders after rejecting ONI’s natural justice claims.

The Court of Appeal has allowed GNC Holdings LLC to enforce an arbitral award against ONI Global Pte Ltd and LAC Global (Singapore) Pte Ltd, following a dispute over the rebranding of 54 former GNC stores.

In a written judgment dated 25 May, the court dismissed ONI’s appeal and allowed GNC’s appeal, overturning part of an earlier Singapore International Commercial Court decision that had refused enforcement of three specific-performance orders.

The dispute arose after ONI terminated its Singapore franchise agreements in May 2022 and rebranded the stores as LAC outlets. The parties brought the dispute to arbitration in Pittsburgh, Pennsylvania, where the tribunal found largely in favour of the franchisor.

The arbitral tribunal held that ONI had repudiated the agreements and breached post-termination covenants, awarding GNC post-termination damages of $24.2m (US$18.9m).

The franchisee resisted enforcement in Singapore, citing alleged evidence destruction, a failure to consider a key argument, a late damages case, and specific-performance orders that it said went beyond the arbitration’s scope.

The court rejected the challenges, saying the tribunal had already dealt with the deleted text messages and imposed a limited adverse inference.

The franchisee’s natural justice arguments were also rejected, with the judges finding that it had not properly raised the alleged critical argument before the tribunal.

The Court of Appeal also restored three specific-performance orders, including requirements for ONI and LAC to update GNC on landlord consent efforts and comply with reasonable requests.

The court said it would hear parties on costs if they cannot reach an agreement within 14 days.

US$1 = $0.78