VISU SINNADURAI, J

Visu Sinnadurai

This case deals with the legal effect of two recording contracts entered into between the plaintiffs, Polygram, a recording company, and a group of young artistes known as The Search.

This court is also called upon to determine whether the principles applied by the English courts in certain recent cases are equally applicable in Malaysia to the local music industry. I am given to understand that this is the first case of this nature, where the validity of such a recording contract is being considered by a Malaysian court. This decision, I am told, therefore, has some important bearings especially to the recording and performing arts industry in the country.

The validity of similar recording contracts as those entered into between the plaintiffs and the defendants, whereby a young artiste undertakes to record for a particular recording company for a specified duration, and upon terms and conditions imposed by the company, has come under close scrutiny in recent years, especially by the English courts.

In Schroeder Music Publishing Co Ltd v Macaulay [1974] 3 All ER 616; [1974] 1 WLR 1308, the House of Lords upheld the decision of the judge at first instance who had held a contract between a songwriter and a music publishing company for an initial period of five years, to be against public policy as being in restraint of trade, and thus void. Soon after, in Clifford Davis Management Ltd v WEA Records Ltd [1975] 1 All ER 237; [1975] 1 WLR 61, the Court of Appeal held that the two contracts entered into between the two members of the pop group, Fleetwood Mac, with a publishing company, whereby they undertook to grant the publishing company the worldwide copyright in all the works composed by them over a period of ten years, were made between parties with unequal bargaining power, and therefore ought to be set aside.

In the Elton John's case, decided in 1985 (Elton John & Ors v Richard Leon James & Ors [1991] FSR 397), Elton John and Bernie Taupin signed an exclusive publishing agreement with a publishing firm, Dick James Music Ltd (DJM). This contract was the first in a series of contracts signed by the two young musicians beginning in 1967, the others being an exclusive recording agreement with DJM's subsidiary, and a management agreement between Elton John and DJM. Under the publishing agreement, both the composers assigned to DJM the full copyright throughout the world in all their musical compositions made during the term of their agreement. The agreement was for three years, renewal for a further period of three years at the option of either party.

When the validity of these agreements was subsequently challenged, the trial judge (Nicholls J), held that, in principle, the agreements ought to be set aside on the grounds of undue influence; though because of the long delay in bringing the action, such a remedy, in the instant case, was not appropriate.

In O'Sullivan v Management Agency and Music Co Ltd [1985] QB 428; [1985] 3 All ER 351; [1984] 3 WLR 488, an exclusive management contract entered into by the well-known singer, Gilbert O'Sullivan, with his manager, was held to have been obtained by undue influence.

More recently, in Silverstone Records v Gary Mountfield & Ors (1991) (unreported but a full transcript of the judgment was submitted to the court by counsel for the defendants), the two agreements entered into by the artistes (Stone Roses) with the recording and publishing companies were held to be in restraint of trade and being unreasonable on the grounds that they were oppressive, and imposed unjustified and unjustifiable restraint of trade.

Finally, since the completion of the hearing of the present case, another decision has now been delivered by the English courts. On 21 June 1994, Parker J, in the case of Panayiotou & Ors v Sony Music Entertainment (UK) Ltd (The Times, 30 June 1994) ('the George Michael case'), delivered a 273-page judgment holding that an exclusive con