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2012 Supreme(Bom) 1710

High Court of Judicature at Bombay
ANOOP V. MOHTA
M/s. Media Masters & Another
Versus
M/s. Reasonable Advertising Pvt. Ltd.
Arbitration Petition No. 461 of 2009
Decided on: 10-09-2012

Advocates Appeared:
For the Petitioners:Ms. Mandakini D.S. Singh, Advocate.
For the Respondent:M. Baravi i/b. B.G. Saraf, Advocates.

Headnote:

Arbitration - Television Serial Contract - Agreement dated 19th May 2006 - Section 11 of the Arbitration Act - Section 34 read with Section 16(6) of the Arbitration Act - [TV Serial Contract] - [Arbitration Act] - [Section 11, Section 34, Section 16(6)] - The court discussed the nature of the TV serial contract, the appointment of the arbitrator, the interpretation of the contract terms, and the legal grounds for challenging the arbitration award. The court emphasized the importance of considering the entire contract and the commercial aspects of the TV serial business in interpreting the clauses. It found that the arbitrator's decision was based on a wrong interpretation of the contract terms and remanded the matter for reconsideration by the arbitrator.

Fact of the Case:

The Petitioner challenged an arbitration award related to a TV serial contract. The court found that the arbitrator's decision was based on a wrong interpretation of the contract terms and remanded the matter for reconsideration by the arbitrator.

Finding of the Court:

The court found that the arbitrator's decision was based on a wrong interpretation of the contract terms and remanded the matter for reconsideration by the arbitrator.

Issues: The main issue was the interpretation of the TV serial contract terms and the legal grounds for challenging the arbitration award.

Ratio Decidendi: The court emphasized the importance of considering the entire contract and the commercial aspects of the TV serial business in interpreting the clauses. It found that the arbitrator's decision was based on a wrong interpretation of the contract terms and remanded the matter for reconsideration by the arbitrator.

Final Decision: The court quashed and set aside the arbitration award, except for the costs, and remanded the matter for reconsideration by the arbitrator. Both parties were directed to bear their costs.

Judgment

The Petitioner has challenged impugned order dated 13th March, 2009, passed by the Sole Arbitrator.

2. The operative part of the Award is as under:

“AWARD

A) The Claim of the Claimants is allowed and it is hereby ordered that the Respondents shall pay Rs.29,51,000/-to the Claimants pursuant to this award alongwith interest of Rs.12% p.a. from 15th August, 2006 to till the date of realization.

B) The counter claim of the Respondents is rejected and dismissed with no order as to cost. The Respondents to bear their own costs for defending the claim and also cost in the counter claim.”

2. The basic events as per the Petitioners are as under:

On 4th April, 2006, the letter granting approval by Surya TV to “Onam Bumper” for initial telecast of 65 episodes on Monday to Friday during prime time slot at 10.00 to 10.30 p.m. stating that each episode should be of 25 minutes and allotting 240 seconds of Free Commercial Time (FCT) which could be marked.

3. On 19th May, 2006, execution of the Contract between Petitioner No.1 and Respondent for production of the serial by the Petitioners and its allotted FCT's marketing on the terms and conditions stated therein.

4. On 11th July, 2006, notice addressed to Petitioners copy endorsed to Respondent stating that they were discontinuing the policy of banking FCT's w.e.f. 1st August, 2006.

5. On 24th July, 2006, the Petitioners at the insistence and instance of the Respondent informed Surya TV that henceforth, Respondent has been authorized as their sole marketing agency for exclusive sale of FCT of the programme, “Onam Bumper” and confirming that the invoices should be raised in the Respondent's name as they would be paying the telecast fees and service tax directly to them. Clause 16 of the Agreement stood varied/modified.

6. On 28th July, 2006, the termination notice addressed by Respondent to Petitioners on the basis that required TVR was not being delivered by the Petitioners. On 4th August, 2006, Surya TV stops telecast of serial as Respondent fail and neglect to pay the telecast fees to them. On 10th August, 2006, the Petitioners reply to notice, inter alia informing them that notice was premature. On 19th August, 2006, the Respondent's Advocate's rejoinder denying the premature nature of the notice and calling upon the Petitioners to buy back the FCT. On 14th September, 2006, the Respondent invokes arbitration, nominating Mr. Pravin Aggarwal. On 18th September, 2006, the Petitioners sur-rejoinder stating that TVR cannot be applied to production fees for the1st 33 episode as per clause 10 of the agreement. On 28th October, 2006, the Petitioners reminder to their letter dated 18th September, 2006 and suggesting the name of Mr. Ganesh as he had both media and marketing / advertising background. In October 2006, the Respondent files Arbitration Application No.206 of 2006 before the Bombay High Court. On 25th April, 2007, the Petitioners advocate writes to the Respondent's Advocate suggesting four names of suitable persons from the media and marketing/advertising background. On 21st June, 2007, the order in Arbitration Application passed appointing the Hon'ble Justice Mr. D. G. Deshpande (Retd.) as the Sole Arbitrator and inter alia recording the Petitioners only objection being inability to pay for the high cost of arbitration in Mumbai. On 7th August, 2007, letter fixing preliminary meeting on 22nd August, 2007, by the Hon'ble Justice Mr. D. G. Deshpande (Retd.) to both parties, when the Petitioners realized that order dated 21st June, 2007 had been passed in Arbitration Application No.206 of 2006, copy of which was made available to them only on 14th August, 2007. On 16th August, 2007, the Petitioners informed that they applied for rectification of said order dated 21st June, 2007. The Petitioners file application for rectification of the order dated 21st June, 2007.

7. On 22nd August, 2007, the learned Arbitrator ruled on the Petitioners objection to his appointment, exparte rejecti





























































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