“All out” for no loss!
The
Indian Premier League (“IPL”) has created
ripples in the nation in more than one way. Security concerns
and venue changes had already created enough mayhem, but the row
over the media rights of the IPL (“Media Rights”)
between MSM Satellite (Singapore) Pte Ltd., formerly known as
Sony Entertainment Television (“MSM/Sony”) and
Board of Control for Cricket in India (“BCCI”)
contributed further to the burgeoning chaos. BCCI terminated its
agreement with MSM under which MSM had Media Rights license for
the Indian subcontinent on March 14, 2009 and the latter
approached the Bombay High Court (“Court”) on
March 15, 2009 seeking an interim relief to prevent BCCI from
negotiating with other broadcasters for the telecast of the
forthcoming seasons of the IPL. Subsequently, on March 23, 2009
the Court lifted the injunction on BCCI and held that the
balance of convenience cannot be determined in the absence of a
“necessary party”, World Sports Group (Mauritius) Ltd. (“WSG”)1.
However, after a two-week-long legal battle the parties settled
the dispute with BCCI signing a new deal again with MSM and WSG
for Rs 8,200,00,00,000/- (Rupees Eighty Two Billion Only) for
Media Rights— 80% of this is expected to come from MSM.
Background
On
January 21, 2008, Sony and BCCI entered into an Indian
Premier League Media Rights Licence Agreement (“MRLA”)
under which MSM acquired the license to exploit the Media Rights
for the Indian subcontinent. These rights were granted for a
period of five years. After the first season of the IPL, Sony
received an email on behalf of BCCI citing certain operational
issue with regard to live coverage of IPL matches.
Later, on February 3, 2009 MSM was served a legal notice by BCCI
alleging that MSM had breached the terms of the contract and had
sold broadcast sponsorship in the DTH product category to Airtel
inspite of Sony being intimated that Reliance would be the
IPL official sponsors in the Digital TV provider/ Direct to Home
(“DTH”) category. MSM denied such allegations
and entered into negotiations with BCCI following which an
amended MRLA agreement incorporating the negotiation terms was
circulated on March 14, 2009. However, the same day MSM was
served a notice terminating the MRLA citing operational issues
namely, virtual advertising and quality and integrity of the
broadcast of IPL-2008 season matches and sale of broadcast
sponsorship to Airtel instead of Reliance for the DTH category.
Immediately, MSM filed an arbitration petition with the Court on
March 15, 2009 pleading that the MRLA is valid and that the
termination of the same is illegal and malafide. The Court
passed an ad-interim order restraining BCCI from entering into
any media rights license agreement with any third party. On
March 16, 2009 the BCCI had filed an affidavit before the High
Court for placing on record the fact that BCCI had, prior to
passing of March 15 order entered into an agreement with WSG for
the grant of Media Rights. Following this, MSM filed an amended
petition seeking an order and injunction against BCCI, pending
the hearing and final disposal of the arbitration petition from
acting in furtherance of or implementing the agreement with WSG.
(“Ad-Interim Relief”).
The Order:
The
Court remarked, “The Court cannot do indirectly which in law
cannot be done directly”. The Court refused to grant the
Ad-Interim Relief prayed by Sony on the grounds that passing of
such an order would directly and/or substantially affect and
interfere with the enjoyment and exploitation by WSG of their
vested legal rights and present interest in the subject matter
of the contract created in their favor. Therefore, balance of
convenience cannot be determined between the two parties in the
absence of WSG which is a necessary party. Thus, the Court
refused to grant an Ad-Interim Relief in favour of Sony.
Conclusion:
With recent news reports blaring out the compromise terms
between the two parties, it seems more likely that the parties
may opt for an out of court settlement withdrawing its
application before the Court. An “all out for no loss” situation
you may say! But we have witnessed enough furore with this event
and intend on keeping a close watch on how things turn out. Look
out for more updates on this from the court room!
__________________________
1. MSM Satellite (Singapore) Pte.Ltd. v.Board of Control for
Cricket in India Arbitration Petition (Ld) No.284 of 2009
Source:http://bombayhighcourt.nic.in/data/original/2009/ARBP28409230309.pdf
