SAPNA Vs. MX MEDIA AND ENTERTAINMENT PTE LTD

JUDGEMENT

(1.) By way of present petition filed under Sec. 34 of the Arbitration and Conciliation Act, 1996 (hereafter, the 'A&C Act'), the petitioner/judgment debtor has raised objections to the Award dtd. 31/10/2022 (hereafter, the 'impugned award') delivered by the Arbitral Tribunal comprising of Sole Arbitrator (hereafter, 'AT').

(2.) The impugned award was delivered in the context of Services and Alliance Agreement dtd. 12/4/2019 (hereafter, the 'Agreement') and amended on 22/5/2019. The respondent/claimant/award holder has claimed itself to be a company engaged in the business of production, development, marketing and distribution of media and entertainment content. The judgement debtor is claimed to be a renowned artist in the entertainment industry in India. Under the Agreement, judgement debtor received a sum of Rs.2.5 crores on 31/5/2019 as advance payment towards her obligation under the Agreement. Disputes arose between the parties and in the negotiations held on 5/2/2020, judgement debtor issued a post-dated cheque for a sum of Rs.2.00 crore towards refund of the advance received by her. A Draft Settlement Agreement prepared at the instance of decree holder was however not signed by the judgement debtor. Admittedly, the post-dated cheque for Rs.2.00 crore was not presented and encashed. Disputes further arose when decree holder claimed breach of exclusivity clause of the Agreement when judgement debtor uploaded a music video of her song 'Jalebi' on the YouTube. Later, settlement talks were initiated between the parties but the same did not fructify resulting in an email dtd. 10/11/2020 sent by judgement debtor thereby terminating the Agreement. Decree holder issued notice dtd. 15/3/2021 under Sec. 21 of the A&C Act resulting in commencement of the arbitral proceedings. Vide the impugned award, AT partially allowed the claim and awarded a sum of Rs.2.00 crore alongwith interest @ 12% from 25/8/2020 till payment.

(3.) Decree holder had filed three claims. It claimed Rs.2.5 crores that was paid to judgement debtor as advance payment. Decree holder claimed that judgement debtor committed breach of the Agreement. Judgement debtor contended that Agreement dtd. 12/4/2019 as amended on 22/5/2019 were void ab initio as the same were exploitative. It was further contended that though the judgement debtor was obligated to perform, the Agreements were frustrated, closed and terminated on account of COVID-19 being the Force Majure event under Clause 11.1 of the Agreement. Even otherwise, the initial agreement dtd. 12/4/2019 was novated by the subsequent agreement 22/5/2019 which did not contain any arbitration clause. Further, the parties reached an oral understanding on 5/2/2020 resulting in issuance of the post-dated cheque dtd. 25/8/2020 of Rs.2.00 crores by judgement debtor as full and final settlement. It was also claimed that though judgement debtor had offered 17 live events till February, 2020, the decree holder arm-twisted her and obtained the post-dated cheque of Rs.2.00 crores against her will. AT noting the issuance of post-dated cheque of Rs.2.00 crores by the judgement debtor which concededly was never encashed by decree holder, awarded a sum of Rs.2.00 crores. The second claim was filed seeking damages to the tune of Rs.1,16,68,400.00 towards losses suffered by the decree holder on account of breaches committed by the judgement debtor. The claim was rejected as the decree holder had failed to substantiate the same. The third claim related to the damages suffered to the decree holder's goodwill. The said claim was also rejected for the lack of evidence.