Whatever your storage methodology, upkeep is key. The general rule of thumb for outdoor furniture is to apply oils and sealants about every once to twice a year, depending of course on your individual concerns, temperature, climate, etc.
The best sandpaper to use would be a 320 grit. You will need to take caution to follow the grain of the wood when sanding, never sand against the grain as it could cause damage to the wood. After sanding your teak chair, you will want to lightly dust the chair with a soft cloth to remove any residue left over. Your final step will be to lightly coat the chair with teak oil to preserve the luxurious look.