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IN THE HIGH COURT OF DELHI AT NEW DELHI
C.HARI SHANKAR, J.
Pinaka Studios Pvt. Ltd. – Appellant
Versus
MX Media And Entertainment Pte Ltd - Respondent
O.M.P.(I) (COMM.) 377/2021 & I.A. 15071/2021
Decided on : 18-11-2021
Arbitration and Conciliation Act, 1996 - Section 9 - Code of Civil Procedure, 1908 - Order XXXVIII Rule 5 - Interim measures, etc. by Court - Seeking pre-arbitral interim - Breach of agreement - Termination of Contract - Whether a case for exercise of Section 9 jurisdiction is, or is not, made out - Whether there has, or has not, been default by the petitioner in complying with its obligations under agreement, justifiability of termination of contract by respondent, and all other such associated aspects would, appropriately, have to be tried and tested in arbitral proceedings - Restrain respondent from using and/or airing and/or creating third party rights in respect of content of 550 minutes in respect of series titled as “Raktanchal 2” produced by the Petitioner which is in a hard drive and in possession of Respondent - Direct Respondent to give due credit to Petitioner in title as “Produced By- Pinaka Studios Private Limited”.
Finding of the court: Where claim of claimant is monetary in nature, ordinarily, highest that can be sought from a Court under Section 9, is securing of monetary claim under Section 9(1)(ii)(b). There is no such prayer in present petition. That apart, any direction for securing amount can be passed only if case, in principle, fulfills requirements of Order XXXVIII Rule 5 of Code, 1908 - They shall not be treated as binding on arbitral tribunal as and when it is constituted in dealing with claims of petitioner or any interlocutory applications that petitioner may choose to file before the arbitral tribunal - Court unable to hold that any enforceable right, to restrain respondent from completing or airing “Raktanchal– II” web series is made out. The claim of petitioner against respondent, on anvil of contractual terms, is apparently, a simple money claim. Such a claim cannot be protected by a restraint against respondent from airing web series, in absence of any contractual stipulation, justifying such a restraint. There is no contractual provision, granting a lien to petitioner over content developed by it and provided to respondent, till petitioner’s dues are liquidated by respondent.
Result: Petition dismissed
JUDGMENT :
1. This is a petition under Section 9 of the Arbitration and Conciliation Act, 1996, (“the 1996 Act”), seeking certain pre-arbitral interim reliefs.
Facts:
2. The dispute emanates out of a production agreement dated 10th March, 2021, between the petitioner and the respondent. The production agreement contained the following clause, envisaging resolution of the disputes between the parties by arbitration:
3. The opening recital ‘A’ in the agreement stated that the respondent, who was engaged in the business of developing, producing and distributing audio and video entertainment and other related activities, had developed, produced and exploited a web series, known as “Raktanchal”, and was desirous of producing Season 2 of the said web series under the tentative name “Raktanchal II”. The agreement envisaged development, production, addition, editing and delivery, by the petitioner to the respondent, of the said web series, by the name “Raktanchal II”. The series, as created and developed by the petitioner, was to be provided to the respondent on hard disks, made available by the respondent. Clause 3.8 of the agreement provided, in this regard, thus:
4. Clauses 19 and 20 of the agreement, with their various sub-clauses, provided for termination, and its sequelae. They read as under:
19.1 MX shall be entitled to terminate this Agreement upon occurrence of any of the following events, by providing 10 (ten) days’ notice in writing to the Production Company:
19.1.1 the Production Company breaches any of the terms and conditions of this Agreement, and fails to cure such breach within of the aforesaid 10 (ten) days’ notice period.
19.1.2 any representations and/or warranties of the Production Company are found to be false, misleading, untrue, or inaccurate in any manner, and the Production Company fails to remedy such inaccuracy within the aforesaid 10 (ten) days’ notice period.
19.1.3 the Services rendered by the Production Company not being in accordance with the terms and conditions of this Agreement.
19.1.4 on the commission or omission of any act by the Production Company which is prejudicial to the interest of MX, its associates and/or its affiliates, and/or the Series.
19.1.5 any petition for winding up, liquidation, insolvency or bankruptcy of the Production Company being adjudicated in any competent court.
19.2 Further, MX shall be entitled to terminate this Agreement by giving a prior written notice of 15 (fifteen) days to the Production Company.
19.3 The Production Company shall be entitled to terminate this Agreement by providing 15 (fifteen) days’ prior notice in writing to MX, in the event of a default by MX in payment of any part of the Production Budget it accordance with this Agreement, and having failed to remedy such default within the aforesaid period of 15 (fifteen) days of being notified in writing by the Production Company of the occurrence of such default in payment.
20. CONSEQUENCES OF TERMINATION
20.1 Upon termination of this Agreement by MX pursuant to Clause 19.1 above, the
Section 9 of the 1996 Act cannot be used as a tool to compel the opposite party to pay money to the claimant.
A contract is not concluded until there is consensus ad idem between the parties.
A party seeking interim relief under Section 9 of the Arbitration & Conciliation Act must demonstrate a manifest intention to invoke arbitration proceedings, which was not established by the petition....
A valid and enforceable contract requires mutual agreement on essential terms; ongoing negotiations and unsigned agreements do not establish legal obligations.
The court emphasized the arbitrability of certain disputes and the grant of injunctions based on a prima facie case of unauthorized trademark use.
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