Court of Appeal upholds GNC’s rights to Ron Sim’s LAC store leases, awarding of damages

Singapore’s Court of Appeal has upheld previous rulings that grant GNC Holdings rights to LAC Global’s retail leases in Singapore and award more than US$18.9 million in damages to the US-based health supplements retailer, court documents from Monday (May 25) showed.

LAC Global (Singapore), alongside associated company ONI Global, is part of V3 Group, the holding company belonging to Osim founder Ron Sim.

LAC Global operated GNC’s franchised stores in Singapore, selling its health products and dietary supplements. However, in 2022, LAC terminated its agreements with GNC.

In a 2024 decision, a tribunal in the US found that this termination was wrongful.

In response to queries from The Business Times, LAC said that ONI Global and LAC Global (Singapore) respect the legal process.

“The companies are reviewing the judgment with our legal advisers and will act in accordance with our legal obligations,” it said. “As this remains a legal matter, we are not in a position to comment further at this stage.”

It added that it continues to focus on serving consumers and partners, as well as upholding “the standards expected of our business and brands”. There are currently 64 LAC outlets in Singapore.

LAC did not provide details on whether the stores would be rebranded, nor on their future operators.

Relationship breakdown

The legal saga started after GNC emerged from bankruptcy with new ownership in 2020. At the time, there were disputes over franchise operations in Malaysia and Taiwan, where ONI operated GNC stores through other associated companies.

In the arbitrations over the Malaysia and Taiwan operations, LAC proved that GNC had committed serious contract breaches by wrongfully terminating the franchise agreements before their natural expiration.

The disputes over the Singapore business were arbitrated before a three-member tribunal in Pittsburgh, Pennsylvania in 2024.

LAC believed that GNC’s executive vice-chairman, named only as Wong in court documents, wanted to push it out of the franchise. Without informing GNC, LAC moved to rebrand its 54 GNC stores in Singapore, and unilaterally terminated the franchise agreements.

LAC believed that it would be legally released from its post-termination obligations – including the requirement to hand the stores back to GNC upon termination – because of GNC’s breaches.

GNC commenced arbitration against LAC, alleging wrongful termination. LAC filed its own arbitration days later, seeking declarations that it was entitled to keep the stores.

Tribunal, SICC favour GNC

The Pittsburgh tribunal found that while Wong may have envisioned replacing LAC in Singapore, there was no evidence that GNC had taken steps to terminate the Singapore franchise.

It found that LAC did not have a legal right to terminate the agreements and keep the stores in Singapore, and ordered LAC to assign the rights and interests in its retail outlets back to GNC, and pay damages covering lost profits, royalties and brand damage.

In March 2025, GNC obtained permission to enforce the arbitration award in Singapore.

LAC challenged the arbitration enforcement, but the Singapore International Commercial Court (SICC) panel in October 2025 rejected these arguments and largely upheld the tribunal’s decision. 

However, SICC set aside three specific sub-orders that detailed particular implementation requirements.

Failed appeal

In the latest hearing, ONI challenged the SICC’s decision, relying on the same grounds it had raised before. GNC made a cross-appeal, against the decision to set aside the three orders.

On GNC’s spoliation of evidence – where there were missing text messages from the existing text strings involving Wong – the court agreed with the SICC that the court should exercise the “greatest caution possible” before reopening and relitigating questions of alleged procedural fraud “which had been fully dealt with by the tribunal”.

The tribunal is best placed to judge the significance of such an alleged breach, it said. It assessed that there were no circumstances that warranted relitigation.

ONI’s case argued that the tribunal failed to consider a critical argument – that GNC’s plan to “take back” the Singapore business was not limited to appointing another franchisee, but also potentially involved GNC taking over 54 stores and running them itself.

The appeals court noted this argument was not properly brought before the tribunal; that there was no evidence that the tribunal failed to consider this argument; and that the tribunal had made findings which contradicted it.

It agreed with SICC’s judgement that the requirements for raising a natural justice challenge were not satisfied.

ONI argued that due process was not followed when GNC’s raised a new and unpleaded claim. The appeals court ruled that ONI’s conduct amounted to impermissible hedging.

However, the Court of Appeal found that the SICC erred in denying enforcement of three sub-orders under the award. It overturned the earlier decision not to enforce the orders.

These three orders govern the handover process. They require LAC to provide twice-weekly updates on securing landlord consent and comply with GNC’s requests to secure that consent.

They also legally entitle LAC to pursue remedies if GNC fails to honour warranties regarding store operations and employee protections.

The appeals court found that the order’s terms were relevant to matters within the scope of submission to arbitration, “as they were connected to the enforcement of the post-termination covenant and addressed concerns raised by the parties”.

It also said that it was “reasonably foreseeable” that the tribunal would craft the order “in a manner different from what parties sought, imposing terms it considered would fairly address various concerns expressed”.

These terms also flowed reasonably from arguments advanced during arbitration, the appeals court said.

It added that while the SICC considered that ONI was deprived of the opportunity to make submissions “which had a real chance” of causing an adjustment to the three orders, this did not meet requirements for breach of natural justice.

Source: The Business Times © SPH Media Limited. Permission required for reproduction.

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