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2025 Supreme(Mad) 4272
IN THE HIGH COURT OF JUDICATURE AT MADRAS
P.B. Balaji, J.
Mr.Narayanan Ramasamy - Petitioner
Versus
SUN TV Network Limited - Respondent
Arb.O.P(Com.Div.) No.333 of 2024 & E.P.No.13 of 2024 & E.P.DR.No.155146 of 2023
Decided On : 31-01-2025
Advocate Appeared:
For the Petitioner: Mr.S.Karthikei Balan
For the Respondent: Mr.Jose John for M/s.King & Partridge
The court affirmed that arbitration awards must remain within the scope of the arbitration agreement, and judicial review is limited to instances of patent illegality.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 34, 28(3), 16 - Challenge to Arbitral Award - The petitioner sought to set aside the Final Award dated 29.08.2023 due to alleged excessiveness beyond arbitration scope and public policy violations - The parties had entered a Theatrical Distribution Agreement with a minimum guarantee of Rs.79,50,00,000/-; however, the petitioner only paid Rs.29,00,00,000/- - A Memorandum of Compromise was established to settle dues, which included arbitration clauses - The Arbitral Tribunal awarded Rs.1,08,97,380/- to the respondent, which the petitioner contested as illegal and unsustainable - The court found the claims were within the arbitration scope and dismissed the petition. (Paras 1-27)
Facts of the case:
The dispute arose from a Theatrical Distribution Agreement for the film 'Sarkar', where the petitioner failed to pay the minimum guarantee, leading to a compromise and subsequent arbitration due to non-compliance with the agreement terms.
Findings of Court:
The court ruled that the award was within the arbitration scope, and the petitioner had not raised jurisdiction objections before the Tribunal, thus waiving such rights.
Issues: The main issues involved whether the reliefs granted fell within the scope of arbitration and if the award was contrary to public policy.
Ratio Decidendi: The court held that the claims were arbitrable, and the award did not exceed the terms of the arbitration agreement, reinforcing the principle that an arbitrator's interpretation of contract terms is not subject to judicial interference unless patently illegal.
Result: Original Petition dismissed.
ORDER :
P.B. Balaji, J.
This Original Petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 , to set aside the Final Award dated 29.08.2023 passed in Arbitration O.P.(Comm.Div.) No.253 of 2022 passed by Mr.Justice V.Bharathidasan, Former Judge, Madras High Court, as Sole Arbitrator, in its entirely and to direct the respondent to pay the cost.
2.The dispute arise out of a Theatrical Distribution Agreement pertaining to the film 'Sarkar' vide Agreement dated 26.10.2018. The parties had agreed on a minimum guarantee sum of Rs.79,50,00,000/- payable by the petitioner. The petitioner being unable to pay the minimum guarantee would come up with a payment of Rs.29,00,00,000/- alone, leaving a balance of Rs.51,00,00,000/-. In order to settle the disputes, the parties negotiated for an amicable settlement and a Memorandum of Compromise was entered into between the parties on 23.09.2021, in and by which, the petitioner transferred his immovable properties in favour of the respondent towards part settlement of dues to the respondent, leaving a balance of Rs.33,74,90,090/-. The Memorandum of Compromise contains arbitration clauses (clauses 10 and 11). The petitioner did not honour the said compromise and disputes arose between the parties.
3.The respondent/claimant made a claim before the Arbitral Tribunal and after trial, the Arbitral Tribunal has awarded a sum of Rs.1,08,97,380/- in favour of the respondent/claimant. Aggrieved by the said award and challenging the same on the ground that the relief granted to the claimant is illegal and unsustainable, being outside the scope of arbitration in terms of Section 28 of the Act r/w Section 34(2)(a)(iv) and 34(2)(b)(ii) of the Arbitration and Conciliation Act, 1996 , the present Original Petition has been filed.
4.I have heard Mr.Karthikei Balan, learned counsel for the petitioner and Mr.Jose John, learned counsel for M/s.King Partridge, for the respondent.
5.The learned counsel for the petitioner, Mr.Karthikei Balan, would invite my attention to the Memorandum of Compromise dated 23.09.2021, more specifically clause 10 of the said Memorandum of Understanding which limits the arbitrable dispute to clause 10 of the Memorandum of Compromise alone. He would therefore contend that the reliefs granted by the learned Arbitrator are beyond the scope of arbitration and not arbitrable disputes in the first place. He would further contend that the award is opposed to public policy and hit by Section 34 of the Act. He would refer to the written submissions of the respondent where it is said to have been admitted by the respondent that the movie 'Sarkar' has made only a collection of Rs.62,34,94,760.04/- and hence, there could have been no net receipts generated in the theatrical distribution of the film and the award is clearly contrary to the said admitted position.
6.The learned counsel for the petitioner would also refer to Income Tax returns where the respondent has admitted to have forfeited the amounts to the tune of Rs.1,08,97,380/-. Also referring to the decision of the Hon'ble Supreme Court in Suresh Shah Vs. Hipad Technology India Private Limited reported in (2021) 1 SCC 529 , the learned counsel for the petitioner would contend that the eviction of tenancy being a matter granted by a special statute, disputes are non arbitrable. The relief granted to the respondent/claimant includes the reliefs for handing over possession and the learned counsel for the petitioner would argue that the award is patently illegal and also oppose to public policy and hence, liable to be set aside.
7.Per contra, Mr.Jose John, learned counsel for the respondent would submit that the petitioner had approached the respondent for grant of exclusive license for theatrical distribution of film 'Sarkar' and an agreement was entered into on 26.10.2018, styled as Theatrical Distribution Agreement, granting a worldwide exclusive right to the petitioner to distribute the film for a period of one yea
