NIMBUS COMMUNICATIONS LTD. Vs. PRASAR BHARTI AND ORS.

JUDGEMENT

(1.) The challenge in this petition under Section 34 of the Arbitration and Conciliation Act, 1996 (Act, in short) is to the interim award dated September 16, 2014 passed by the Arbitral Tribunal (Tribunal, in short), by majority (Hon'ble Mr. Justice S.P.Bharucha, Presiding Arbitrator and Hon'ble Mr. Justice B.P. Jeevan Reddy) whereby the Tribunal has awarded in favour of the respondent No. 1 an amount of Rs.22,77,67,422/-. By a dissenting order, dated September 18, 2014, Hon'ble Mr. Justice V.N.Khare has held that the application for interim award be taken up for hearing after evidence is led by the parties on a reasoning that the expression used "adjustment of liabilities cannot be construed as an admission of claim by the petitioner.

(2.) On November 11, 2005, the Govt. of India had notified guidelines known as Downlinking Guidelines, which inter alia, provided in para 5.2 thereof, for compulsory sharing of signals of sporting events of national importance by the rights holders with Prasar Bharti. The said guidelines also provided that insofar as cricketing events are concerned, all cricket matches featuring the Indian Team and the Semi-Finals and Finals of International events would constitute sporting events of national importance. The downlinking guidelines provided, the revenues generated by the sharing of signals by the rights holders with Prasar Bharti would be shared in the ratio of 75:25 between the rights holders and Prasar Bharti. The guidelines also provided as to who, out of the rights holders and Prasar Bharti would undertake the marketing of commercial times associated with telecast. It is noted that the rights holders had to provide the live signals of sporting events of national importance to Prasar Bharti without advertisements and Prasar Bharti had to retransmit the live signals on its terrestrial and DTH networks (Doordarshan National and DD Direct). During the transmission of the matches on Doordarshan National, opportunities for airing the advertisements would arise. Therefore, it was also necessary to provide as to who would book advertisements. The guidelines provided that the party that offered to maximise, the revenue would be appointed as the Revenue Management Company. The appointment was formalized through a bidding process, whereunder, both parties would give sealed bids in respect of their estimation of the revenues that could be generated by way of advertisements to be carried on Doordarshan during the telecast of the matches. The party which would give the higher estimation would get the right to book the advertisements and the revenues so collected would be shared in the ratio of 75:25 as between the rights holders and Prasar Bharti.

(3.) On December 5, 2005, the uplinking guidelines were notified. I note from record, the uplinking guidelines also contained a provision similar to the one contained in downlinking guidelines insofar as the sharing of signals of sporting events of national importance were concerned.