Friday, 20 January 2012

MEN-FTV spat in Supreme Court

The Supreme Court (SC) will hear a decade-long dispute between international fashion channel FTV BVI and its Indian licensee Fashion Television India Pvt Ltd (FTV India) on 20 January 2012, after FTV India sought relief from the apex court.
FTV India wants the apex court to restrain FTV BVI from entering into any third party agreements for distribution and licensing of the channel in India till the dispute over termination of a contract is resolved between them.
FTV India is owned by Modi Entertainment Networks (MEN), a joint venture between Lalit K Modi and Walt Disney. Austria-based FTV Programmgesellschaft mbH is the parent company of the FTV brands.
Challenging the Delhi high court’ judgement that dismissed its appeal in November last year, FTV India has challenged the decision by the foreign channel to terminate its agreement following differences over revenue sharing and outstanding payments. The Indian licensee said that the high court ignored that granting damages cannot have be ‘‘proper and effective remedy’’ as such sudden termination of the contract by the global broadcaster cannot be calculated in money terms.
FTV and its Indian partner had entered into a five-year contract in August 2001 for exclusive distribution of the channel in the Territory (ie, India, Pakistan, Bangladesh, Nepal, Bhutan, Sri Lanka and Maldives). But within two years, the global broadcaster in 2003 alleged breach of contract by the Indian partner and threatened to terminate the contract and de-encrypt the signals of the world’s first channel dedicated to fashion, beauty and style.
Soon FTV India went free-to-air, triggering the dispute between the two sides over revenue sharing and outstanding payments.
Due to this, the cable operators discontinued to pay the channel charges of FTV and also refused to clear the outstanding dues of the Indian company, thereby causing heavy losses, the petition filed by FTV India stated.
This led the Indian company to move the high court, which in May 2003 held that no Indian company or group of companies could get into any business arrangement with FTV directly for business purposes in India. In 2006, the dispute was settled between the parties by making some alterations in the commercial terms. However, according to the petition, the main agreement of August 9, 2001 remained valid.
The foreign company later in March 2011 again alleged breach in respect of payments and reiterated that it was negotiating with third parties for granting distribution rights. ‘‘Objecting to unreasonable conduct of FTV,’’ FTV India moved the high court seeking to restrain the foreign partner from entering into an agreement for distributing, marketing and merchandising with any third party.
While the high court in May last year restrained FTV from terminating the agreement, the order was later vacated by an arbitral tribunal in October. Soon the high court dismissed FTV India appeal against the tribunal’s order in November.
The high court stated that any restraint on the global broadcaster from entering into an agreement with third parties would certainly render it idle Single Page Format.


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