Case Note & Summary
The appellant, UTV Software Communications Ltd., entered into an agreement with the respondent, Radaan Media Works Ltd., on 21 June 2001, under which the respondent granted the appellant the exclusive right to market at least 350 episodes of the television serial 'Chithi' on Sun TV. The appellant was to pay Rs. 1,40,000 per episode as production cost and an advance of Rs. 1,00,00,000, with a detailed recoupment mechanism. Clause B of the agreement conferred on the appellant a first right of refusal to market any other programme produced by the respondent. Disputes arose, and the appellant filed an application under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim measures to prevent the respondent from marketing its programmes to third parties, thereby protecting its right of first refusal. The learned Single Judge rejected the application. On appeal, the Division Bench of the Bombay High Court considered whether the appellant had made out a prima facie case for interim relief. The court noted that the right of first refusal was a valuable contractual right and that if the respondent were allowed to market its programmes to others during the pendency of arbitration, the appellant's right would be rendered meaningless. The court found that the balance of convenience was in favour of the appellant and that irreparable loss would be caused if interim protection was not granted. Accordingly, the court allowed the appeal, set aside the order of the Single Judge, and granted interim relief in favour of the appellant, restraining the respondent from marketing its programmes to third parties until the disposal of the arbitration proceedings.
Headnote
A) Arbitration - Interim Measures - Section 9 of the Arbitration and Conciliation Act, 1996 - Right of First Refusal - The appellant sought interim relief to prevent the respondent from marketing its programmes to third parties, claiming a right of first refusal under the agreement. The court held that the appellant had made out a prima facie case and that the balance of convenience was in its favour, as the right of first refusal would be rendered nugatory if interim protection was not granted. (Paras 1-10)
Issue of Consideration
Whether the appellant is entitled to interim relief under Section 9 of the Arbitration and Conciliation Act, 1996, to protect its alleged right of first refusal over the respondent's other programmes pending arbitration.
Final Decision
Appeal allowed. Order of the learned Single Judge set aside. Interim relief granted restraining the respondent from marketing its programmes to third parties until the disposal of the arbitration proceedings.
Law Points
- Section 9 of the Arbitration and Conciliation Act
- 1996
- Interim measures
- Prima facie case
- Balance of convenience
- Irreparable loss
- Right of first refusal
