A court cannot enforce contracts that are determined by time or prevent their termination; the parties must negotiate extensions.

ORDER :

MOUSHUMI BHATTACHARYA, J.

The present application has been filed under section 9 of The Arbitration and Conciliation Act, 1996 for an order of injunction restraining the respondent from giving any effect to the notice of termination dated 10.08.2024 issued by the respondent to the petitioner terminating the Master Service Agreement (MSA) dated 28.03.2023 and the Statement of Work (SOW) dated 01.02.2023.

2. The petitioner obtained an interim order from a Co-ordinate Bench on 09.09.2024 restraining the respondent from giving effect to the notice of termination by discontinuing the services being provided by the respondent to the petitioner.

3. The only point which has been argued by learned counsel for the parties today is whether the MSA and the SOW have both expired by efflux of time on and from 15.10.2024 and 14.10.2024, respectively.

4. Learned counsel appearing for the petitioner seeks to rely on the mails exchanged between the parties to submit that both the Agreements were subsequently extended. This submission is opposed by counsel for the respondent who submits that the respondent did not convey any intention through the mails or otherwise for extending the Agreements.

5. For putting the arguments in proper perspective the relevant clauses of the MSA as well as the SOW are required to be set-out.

MSA:

“4.1. Term: The term of this Agreement shall commence from the Effective Date and shall continue until October 15, 2024 (“Term”). Notwithstanding the foregoing, the term of this Agreement may be extended prior to the expiry of the Initial Term by a period of 1 (one) year, by way of the Client providing a 30 days’ notice to the Service Partner on their intention to extend such term by the period of 1 (one) year, and in such event the Parties shall mutually agree upon the revised Fees & scope of Service Partner Products to be provided by the Service Partner to the Client”

SOW:

“Term shall be deemed to have commenced from 1^st Feb 2023 and shall continue till 14^th Oct 2024 [Initial Term].

The term of this Agreement may be extended prior to the expiry of the Initial Term by a period of 12 (Twelve) months [Second Term], by way of the Client providing a 60 days’ written notice to the Service Partner on their intention to extend such term by the period of 12 (Twelve) months, and in such event the Parties shall mutually agree upon the revised scope to be provided by the Service Partner to the Client and the Consideration thereof for the remaining period.”

6. Considering the clauses set-out above, it would be clear that the term of the MSA was to continue till 15.10.2024 with a caveat that the MSA may be extended prior to expiry of the initial term by a period of 1 year by way of the “Client” (the petitioner) providing a 30 days’ notice to the “Service Provider” (the respondent) of their intention to extend the Agreement by 1 year. The petitioner’s mail evincing interest to extend the Agreement was sent on 12.09.2024. The respondent replied on 14.09.2024 stating that the respondent will get back to the petitioner after finalising the terms of its negotiations with another Media agency. The parties continue to exchange mails with the respondent giving options for renewal/extension of its services on 14.10.2024 and the petitioner asking better pricing terms from the respondent on 29.10.2024. The last mail exchanged between the parties is on 30.10.2024 which states that the respondent expects to provide an update by the end of that week.

7. What is clear from the exchange of mails is that the respondent/ Service Provider has not expressed its unequivocal agreement for extending the MSA. Clause 4.1 of the MSA makes it clear th