Bombay High Court
World Sport Group (India) Pvt. Ltd vs The Board Of Control For Cricket In India on 20 December, 2010
Author: S.J. Vazifdar
Bench: S.J. Vazifdar
This Order is modified/corrected by Speaking to Minutes Order
1 arbp978-10
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO.978 OF 2010
World Sport Group (India) Pvt. Ltd. ]
A company registered under the ]
provisions of the Companies Act, 1956 ]
having its registered office at #4-01, ]
Corinthian, 370, Linking Road, Khar Road, ]
Mumbai-400 052. ] ...Petitioner
Versus
The Board Of Control For Cricket In India, ]
a society registered under the Tamil Nadu
ig ]
Societies Registration Act and having its ]
office at Cricket Center, Wankhede Stadium, ]
Mumbai-400 020. ] ...Respondents
Mr.Aspi Chinoy, Senior Counsel with Mr.Sunip Sen, Mr.Zal Andhyarujina,
Mr.Suhas Tulzapurkar, Mr.Nishad Nadkarni, Mr.Yogesh Chawak,
Mr.Ashutosh Sampat and Mr.Vineet Shrivastava i/b Legasis Partners for
the Petitioner.
Mr.C.A. Sudaram, Senior Counsel with Ms.Aarti Musa, Ms.Akila Kaushik,
Mr.Hetal Thakore i/b M/s.Thakore Jariwalla & Associates for the
Respondents.
CORAM : S.J. VAZIFDAR, J.
DATE : 20TH DECEMBER, 2010.
ORAL JUDGMENT :
1. This is a petition under section 9 of the Arbitration and Conciliation Act, 1996 for an order restraining the respondents from creating any third party rights in respect of the rights conferred upon the petitioner under an agreement dated 25.3.2009 or transferring, alienating or otherwise affecting any rights granted thereunder. The petitioner has also ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 2 arbp978-10 sought an order restraining the respondents from interfering with the implementation of the operations by the petitioner under the said agreement.
2. The respondents are a society registered under the Tamil Nadu Societies Registration Act. The IPL is a sub-committee of the respondents.
One Lalit Modi was at the material time appointed by the respondents as the Chairman and Commissioner of the IPL. The Respondents own and control the commercial rights in respect of a cricketing event known as Indian Premier League (IPL).
3. In November, 2007, the respondents invited tenders to grant the media rights in relation to the IPL.
4(A). According to the petitioner, it required a broadcaster with the right to upload the signals from or to India. The petitioner therefore entered into a pre-bid arrangement dated 14.4.2008 with MSM Satellite (Singapore) Pte. Ltd. (hereinafter referred to as MSM). MSM, however, insisted on acquiring the rights directly from the respondents and not as a sub-licensee of the petitioner.
(B). The petitioner submitted its bid. The tender was awarded to the petitioner. The petitioner thereby became entitled to the entire worldwide media rights in respect of the IPL for a period of ten years from 2008 to 2017.
5. In accordance with the pre-bid agreement that the petitioner had entered into with MSM, it ensured that the IPL media rights it became entitled to were distributed between MSM and itself. Accordingly, two agreements were entered into, both dated 21.1.2008, one between the ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 3 arbp978-10 petitioner and the respondents and the other between MSM and the respondents. A third agreement also dated 21.1.2008 was entered into between the petitioner and MSM.
6(A). By the agreement between the respondents and MSM, MSM was granted media rights to the IPL for the Indian sub-continent for the period 2008-2012.
Under this agreement, a Rights Fee of US $275,400,000 (erroneously stated to be US $275,400,000,000) was payable by MSM to the respondents in varying installments each year and in accordance with the provisions of clause 7. Out of this amount, a sum of various amounts each year aggregating to US $ 46 million was payable contingent upon the average TAM rating of the season being greater than five GRP. (B) The agreement between the petitioner and MSM conferred upon MSM the option to acquire the Indian sub-continent rights for the period 2013 to 2017 through the petitioner for additional consideration.
7. By the agreement between the petitioner and the respondents, the petitioner was granted all other IPL media rights i.e. the Indian sub- continent rights for the period 20013 to 2017 and the rest of the world rights for the period 2008 to 2017. The agreement also provided that if the contract between MSM and the respondents was terminated for any reason, the respondents would negotiate the reversion of the Indian sub- continent rights for the un-expired part of the period 2008-2012 with the petitioner in good faith.
Under this agreement, the petitioner was to pay the respondents, an aggregate Rights Fee of US$642,000,000 comprising: ::: Downloaded on - 09/06/2013 16:42:36 :::
This Order is modified/corrected by Speaking to Minutes Order 4 arbp978-10
- in respect of Rights Period 2008-2012 a sum of US$30,000,000 and
- in respect of the Rights Period 2013-2017, a sum of US$612,000,000.
The amounts were payable in variable instalments each year and in accordance with the provisions of Clause 7. The petitioner was also to pay the shortfall, limited to US$ 35 million, on account of the amounts of US$ 46 million not being payable under the MSM-respondent agreement on account of the TAM rating not being met.
8. The first IPL tournament was held in April-May, 2008.
9. The validity of every agreement hereafter and assertion of the petitioner in regard thereto is denied by the respondents. The respondents case is that every agreement referred to hereafter is fraudulent, and was a result of the collusion between the said former Chairman and Commissioner of the IPL, Lalit Modi and the petitioner and its associate company.
It was suggested that this is a peculiar case where the termination of the agreement between the parties is based on a fraud alleged by a third party viz. MSM respect of its contract with another party viz. WSG-Mauritius. This is incorrect. The allegations of impropriety and fraud have been raised not merely qua the agreement dated 25.3.2009 entered into between MSM and the WSG-Mauritius, but also with respect to the other agreements entered into between the parties herein and WSG- Mauritius and MSM. It is not as if the respondents have alleged that there was a fraud only with respect to the agreement dated 25.3.2009 between MSM and WSG-Mauritius. The respondents have, in effect, alleged a fraud ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 5 arbp978-10 on the part of both WSG-Mauritius and the petitioner in collusion with the said Lalit Modi in the entire matter. Indeed, it has also been the petitioner's case that the three agreements are inter-related and part of a composite arrangement.
10(A). By a letter dated 14.3.2009, the respondents terminated the agreement dated 21.1.2008 between MSM and themselves. (B). On 15.3.2009, the petitioner and the respondents entered into negotiations regarding Indian sub-continent rights for the unexpired period 2009-2012.
11. An agreement was reached in the early hours of the morning prior to 3.00 a.m. on 15.3.2009. The petitioner agreed to a termination of the agreement between the respondents and itself. According to the petitioner, this was at the instance of the respondents and on the understanding between the parties that the respondents would subsequently enter into a similar agreement with it for rest of the worldwide rights on the same terms. The petitioner's further case is that it relinquished its India media rights for the period 2013-2017 on the basis that the respondents would enter into an agreement with its associates World Sport Group (Mauritius) Limited, (WSG-Mauritius) for the media rights for the Indian subcontinent for the period 2009-2017 at the enhanced rate of ` 4791.89 crores in place of the existing ` 3091.60 crores i.e. an additional consideration of ` 1700.00 crores.
(A). The petitioner, respondents and WSG-Mauritius entered into an agreement dated 15.3.2008 titled "Deed of Mutually Agreed Termination". In this agreement, WSG refers to the petitioner and "SONY" to MSM. The ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 6 arbp978-10 relevant provisions thereof read as under :-
"2. MUTUALLY AGREED TERMINATION OF WSG MEDIA RIGHTS AGREEMENT 2.1 The Parties acknowledge and agree that the BCCI has terminated the BCCI-Sony Agreement (i.e. the agreement dated 20.1.2008 between the respondent and MSM) and that given the proximity of the start of the 2009 IPL season, and its obligations to its stakeholders and to protect the interests of such stakeholders, the BCCI wishes to execute new media rights agreements for the period 2009-2017 on an expedited basis.
2.2 In order to facilitate this process, and for good and valuable consideration, the Parties have mutually agreed to terminate the WSG Media Rights Agreement (i.e. the agreement dated 21.1.2008 between the petitioner and the respondents) and to enter into the New WSG Media Rights Agreements.
2.3 The Parties shall have no liability to each other as a result of the mutually agreed termination of the WSG Media Rights Agreement."
(B). On 15.3.2009, the respondents and WSG-Mauritius entered into an agreement for the media rights for the Indian subcontinent for the period 2009-2017.
The Rights Fee was enhanced by ` 1700.00 crores to ` 4791.89 crores payable in accordance with the provisions of Clause 7 for the Rights Period commencing on the date of execution of the Agreement by both parties until 31 December 2017. Under clause 8 ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 7 arbp978-10 WSG-Mauritius was entitled to insert a maximum of 2,000 seconds of commercial time.
Clause 13.1 and 13.5 are important and read as under:-
"13. ASSIGNMENT AND SUB-LICENSING 13.1 Licensee shall not assign or purport to assign, sub-contract or otherwise part with the burden or the benefit of this Agreement or any part thereof or interest hereunder to any person without the prior written consent of Licensor such consent not to be unreasonably withheld except that Licensee shall be entitled to sub-licence this Agreement to a sub-licensee ("Sub-Licensee") within 72 hours of signature of this Agreement by both parties subject to the following terms and conditions:
13.5 The Parties acknowledge and accept that if Licensee fails to execute an SLA within 72 hours of execution of this Agreement that this Agreement shall automatically terminate and all of the terms of clause 11 hereunder (including without limitation all rights granted hereunder reverting automatically and without formality to Licensor) and Licensor shall have no liability to Licensee and Licensee shall have no liability to Licensor as a result of termination under this clause 13.5 the Parties shall thereupon mutually release and waive all rights and obligations to each other under this Agreement."
12. On 15.3.2009, MSM filed Arbitration Petition No.215 of 2009, challenging the respondents' termination of the agreement dated 21.1.2008 entered into between the respondents and itself. An ex-parte, ad-interim injunction was passed restraining the respondents from creating any third party rights till 17.3.2009.
13. At the same time, MSM approached WSG-Mauritius to discuss ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 8 arbp978-10 the possibility once again of obtaining the media rights for the Indian subcontinent. According to the petitioner, it informed WSG-Mauritius that it was negotiating with other broadcasters for the same but that it was willing to negotiate with MSM as well.
14. On 16.3.2009, MSM's application for ad-interim reliefs in Arbitration Petition No.215 of 2009 was heard. The respondents admittedly informed the Court that they had already approved certain broadcasters. The reference was obviously to the said agreement dated 15.3.2009 between the respondents and WSG-Mauritius.
15. It is pertinent to note that the agreements dated 15.3.2009 have also been challenged inter-alia in paragraphs 5 and 18 of the affidavit in reply. In paragraph 5, it is stated that the respondents' practice in keeping with prudent management had been to call for tenders while deciding the award of rights of value. Notwithstanding this practice, the said Lalit Modi entered into an agreement dated 15.3.2009 in the early hours of the morning (2:45 AM) with the petitioner's associate/sister concern WSG- Mauritius. In paragraph 18, the respondents have not accepted either of the agreements dated 15.3.2009 as genuine. In fact it is expressly contended that they were entered into in fraudulent circumstances.
16. I am conscious of the fact that these agreements have been acted upon thereafter for over a year. However, the fact remains that there is nothing on record which establishes the respondents having participated in the formation of the agreement dated 15.3.2009 or the execution thereof. The mere fact that the respondents were in the picture, would not establish ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 9 arbp978-10 the respondents acceptance of the said agreements or even of their having acquiesced in the same.
17. There are aspects about the agreements dated 15.3.2009 which, if not curious, require an explanation. The MSM-respondent agreement dated 21.1.2008 was terminated on 14.3.2009. The agreements dated 15.3.2009 were arrived at at 2:45 AM. The circumstances and the facts leading to the termination notice dated 14.3.2009 and the execution of the 15.3.2009 agreements have not been stated. There are certain very important questions which require an answer in view of the fact that the new agreements of 15.3.2009, which involved an additional consideration of `.1700 crores and a grant of the very valuable media rights for the Indian subcontinent for the period 2009-2013, were entered into within much less than twenty four hours of the termination of the MSM-respondent agreement. It is difficult to imagine such contracts having been negotiated, concluded and drawn up within such a short period of time. The basic questions that would arise in anyone's mind are obvious. At what time was the MSM-respondent agreement dated 21.1.2008 terminated by the letter dated 14.3.2009? At what time did MSM receive the notice of termination? When was the petitioner informed by the respondent/the said Lalit Modi of the termination? Was it before or after the termination? Who participated in the negotiations for the fresh agreements dated 15.3.2009? When did negotiations take place between the parties? The petition does not suggest that the respondents/Lalit Modi informed the petitioner/WSG-Mauritius that it intended terminating the agreement. Presumably, therefore, they were informed of the termination on 14.3.2009. How then were such complex ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 10 arbp978-10 and high-value transactions concluded within just a few hours?
18. I do not suggest that there cannot be a plausible acceptable answer to these questions. But, they must be answered for in the absence thereof, it is difficult to accept at the interlocutory stage that there will be nothing to be said in favour of the respondents at the trial of an action in appropriate proceedings.
19. There is yet another aspect which has not been satisfactorily met by the petitioner. While the MSM-respondent agreement of 25.3.2009 provided an enhancement in the rights fee by `.1700 crores, there is no enhancement of rights fee under the 25.3.2009 agreement between the petitioner and the respondents. The respondents, in paragraph 8 of the affidavit in reply made a point of this and also the fact that when the agreement was entered into, six hundred additional seconds were available for free commercial time. It was contended, therefore, that the loss of revenue to the respondents on this count would be enormous.
In the affidavit in rejoinder, the petitioner stated that whilst the agreement with MSG-Mauritius was a new agreement, the agreement between the petitioner and the respondents was a continuation of the earlier existing agreement and was, at the highest, a novation. The petitioner also denied that the rights fee in the agreement dated 25.3.2009 was enhanced only due to the additional six hundred seconds free commercial time, or otherwise. Mr.Chinoy had, in fact, submitted that the agreements dated 15.3.2009 were entered into at the respondents insistence and on the understanding that the respondents would subsequently enter into a similar agreement with the petitioner for the rest ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 11 arbp978-10 of the world rights on the same terms.
20. Mr.Chinoy admitted that there was nothing in the agreements which indicated that the agreements dated 15.3.2009 were executed on the alleged understanding that the respondents would subsequently enter into a similar agreement with the petitioner for the rest of the world rights on the same terms. The submission is, in fact, contrary to the express terms of the tripartite agreement dated 15.3.2009 and in particular clause 2 thereof which expressly provided that the parties shall have no liability to each other as a result of the mutually agreed termination of the earlier agreements dated 21.1.2008. The submission is, therefore, contrary to the agreement. I can hardly place greater weightage on this alleged oral understanding than on the express terms of a contract, even assuming that the same is genuine. This is, therefore, another aspect which raises a serious question and cannot be answered in the petitioner's favour in an application for interlocutory reliefs.
21. This brings me to Mr.Chinoy's submission that the respondents were, at all material times, aware of the agreement dated 25.3.2009.
22. This next stage involves the working of the agreements dated 15.3.2009 even assuming them to be genuine and enforceable.
23. The period of seventy two hours for appointing a broadcaster under clause 13.5 of the agreement dated 15.3.2009 between the respondents and WSG-Mauritius would have ended at 3.00 a.m. on 18.3.2009. However, the respondents by a letter dated 17.3.2009 stated that they understood that WSG-Mauritius was in an advanced stage of ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 12 arbp978-10 negotiations with other parties including MSM/Sony for a sub-license of the television rights in India; that the hearing before this Court had concluded and that the matter had been reserved for judgment, which was expected shortly. With a view to ensuring that no prejudice is caused to both the parties to the legal action and/or the rights under the agreement are not affected, the respondents agreed to the request of WSG-Mauritius to extend the seventy two hours period upto 3.00 a.m. on 21.3.2009. It was clarified that the extension was subject to the orders that would be passed by this Court and that if the Court granted an injunction, the extension would not be effective.
24. MSM was one of the parties WSG-Mauritius was negotiating with. The petitioner's case is that the terms of a new agreement between WSG-Mauritius and MSM had been finalized on 19.3.2009. It is alleged that MSM again insisted on a direct contract with the respondents which it would not have been able to obtain as long as the agreement dated 15.3.2009 between WSG-Mauritius and the respondents subsisted. The petitioner contends that it was therefore, agreed in principle that WSG- Mauritius would relinquish its rights/allow them to lapse and ensure that MSM was granted a license in respect of the media rights for the Indian subcontinent by the respondents for the period 2009-2017. MSM, in turn, agreed to pay the respondents an increased amount i.e. ` 1700.00 crores which WSG-Mauritius had agreed to pay the respondents under the agreement dated 15.3.2009 between the respondents and WSG-Mauritius. In addition thereto, MSM agreed to pay WSG-Mauritius in installments, a "facilitation fee" of ` 450.00 crores, which was subsequently reduced to ` ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 13 arbp978-10 425/- crores.
25. Mr.Chinoy, the learned Senior Counsel appearing on behalf of the petitioner stated that the sum of ` 425.00 crores comprised of ` 115.00 crores (equivalent to US $ 25 million) being the option fee payable under the agreement dated 21.1.2008 between the petitioner and MSM in the event of MSM exercising the option for the increased term from 2013-2017 for the media rights for the Indian subcontinent, ` 160.00 crores (equivalent to US $ 35 million) towards the agreed TAM rating incentive under the agreement dated 21.1.2008 between the respondents and MSM and ` 150.00 crores being the consideration for the petitioner and WSG-Mauritius relinquishing/surrendering the media rights of the Indian subcontinent for a period 2013-2017.
26. Although it is not relevant in the ultimate analysis, Mr.Chinoy's break-up of the facilitation fee of ` 425.00 crores is not entirely correct. A sum of ` 115.00 crores (equivalent to US $ 25 million) is correctly stated to be the amount that would have been payable by MSM under the agreement dated 21.1.2008 between the petitioner and MSM if it opted to acquire the media rights for the Indian subcontinent for the period 2013-2017. There is no quarrel about the amount of ` 150.00 crores which is a direct consideration for the petitioner/its associate WSG-Mauritius relinquishing the rights for the period 2013-2017. I would add to this the sum of ` 160.00 crores (equivalent to US $ 35 million) as being the payment for the same purpose viz. consideration for the petitioner/its associate WSG-Mauritius, relinquishing the rights for the period 2013-2017. This is for the obvious reason that in view of the tripartite ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 14 arbp978-10 agreement dated 15.3.2009, all rights and liabilities under the agreement dated 21.1.2008 stood terminated. This would include the right thereunder to receive the sum of US $ 35 million.
Thus the additional consideration for this alleged oral agreement was at least `.150.00 crores plus `.160.00 crores aggregating to `.310.00 crores.
27. There is, however, nothing to indicate that the respondents were aware of the oral agreement allegedly arrived at on 19.3.2009. There is, on the other hand, evidence to the contrary. I will be referring in detail to three e-mail messages dated 23.3.2009 addressed by the said Lalit Modi to various broadcasters, the petitioner, WSG-Mauritius and MSM. Suffice it to note at this stage that the first e-mail dated 23.3.2009 expressly stated:-
"Friends BCCI will close with one rights holder by 8 pm tonight. The courts have allowed us to do the same with anyone, any deal. This is for your information.
Warm regards Lalit Modi Chairman and Commissioner IPL."
The petitioner's case is that it had already arrived at an arrangement with MSM on 19.3.2009. If it was so, surely MSM and WSG- Mauritius / the petitioner would have responded by referring to the same in such a matter. They did not do so. It is for this reason that it is significant to note that the e-mail message was addressed to the petitioner/WSG- Mauritius and MSM. This indicates at the very least that it would be necessary for the petitioner to establish the alleged oral arrangement ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 15 arbp978-10 between MSM and the petitioner/ WSG-Mauritius of 19.3.2009.
28. Mr.Chinoy relied upon a sentence in paragraph 5 of the affidavit in reply to contend that the respondents were aware that the negotiations had resulted in a contract between WSG-Mauritius and MSM as the broadcaster within the extended period i.e. prior to 3.00 a.m. on 24.3.2009.
It is however, appropriate to also read two sentences that precede the sentence relied upon by Mr. Chinoy and one that follows it. The four sentences read as under :-
"This agreement with WSGM provided the licensee should find a broadcaster within 72 hours failing which the rights would revert back to the BCCI. On the 16th of March, 2009, the Hon'ble Court was informed by the respondent that even before MSM had moved the petition for interim relief, the fresh agreement with WSG Mauritius PTE Ltd. had been entered into and therefore the petition filed by MSM had become infructuous. On 22-03-2009, Mr.Lalit K. Modi informed the IPL Governing Council that MSM had settled the dispute since they had offered to match the same amount that was offered by WSGM. The next day, however, this Hon'ble Court was not informed of such a settlement and proceeded to give its verdict rejecting the petition of MSM for interim relief." [emphasis supplied] The underlined sentence is the one relied upon by Mr.Chinoy to contend that the respondents were aware of the alleged understanding arrived at between MSM and WSG-Mauritius. While the assertion may well be established at the trial in an appropriate action, I do not think that the pleadings establish the same. The sentence relied upon by Mr.Chinoy could well refer to a settlement between MSM and the respondents qua ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 16 arbp978-10 the respondent's termination of the agreement dated 21.8.2008. The sentence could well suggest that the said Modi informed the respondents that MSM had offered an amount equivalent to the offer by WSG-Mauritius to the respondents in settlement of the dispute relating to the respondents termination of the agreement dated 21.1.2008. This is also a possible interpretation of the averments. At this stage, I would not read the averment to clearly establish the petitioner's contention that the respondents were aware of, much less accepted the alleged oral understanding finalized on 19.3.2009.
29. The respondents were obviously aware of the fact that the negotiations were in an advanced stage between the petitioner/WSG-
Mauritius and the broadcasters.
This is evident from a letter dated 20.3.2009, which is identical to the said letter dated 17.3.2009. By the said letter, the respondents further extended the period under clause 13.1 of the agreement dated 15.3.2009 to 3.00 a.m. on 24.3.2009. In all other respects the letter was identical to the one dated 17.3.2009.
30. On 23.3.2009, the Court rejected MSM's application for interim reliefs on the ground that the respondents had already entered into a contract with WSG-Mauritius, which was not a party to the proceedings. This would be so, for as on this day the agreement dated 15.3.2009 was in force, the seventy two hours period having been extended upto 3.00 a.m. on 24.3.2009.
31. The petitioner's case is that the seventy two hours period stipulated in clause 13.5 of the agreement dated 15.3.2009 between the ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 17 arbp978-10 respondents and WSG-Mauritius was not extended yet again in order to enable MSM to obtain the media rights for the Indian subcontinent directly from the respondents in accordance with the alleged understanding finalized between MSM and WSG-Mauritius on 19.3.2009. This, it is further contended, was implemented and is evidenced by three agreements dated 25.3.2009.
32. The first agreement dated 25.3.2009 was entered into between WSG-Mauritius and MSM. WSG-Mauritius is referred to in the agreement as WSG. The recitals and the relevant provisions of the agreement read as under :-
"WHEREAS:
(A) WSG, its affiliates and MSM have previously worked together in connection with the acquisition of media rights to cricket, including with respect to the Indian Premier League (the "IPL").
(B) WSG has assisted MSM in finalising the BCCI-
MSM Agreement (as defined below) and in relation to finalising bids for media rights in connection with the IPL (collectively, the "Facilitation Services").
(C) In return for performing the Facilitation Services, MSM has agreed to pay to WSG the Facilitation Fee (as defined below) and provide the Bank Guarantees (as defined below) on the terms and conditions hereinafter set out.
NOW THIS DEED WITNESSETH as follows :-
1. INTERPRETATION "BCCI-MSM Agreement" means the IPL media rights ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 18 arbp978-10 licence agreement, entered into on the same date as this Deed, between BCCI and MSM;
"Facilitation Fee" means the amount of 4,250,000,000 Indian Rupees, payable in accordance with Clause 3;
"WSG Agreement" means the IPL licence agreement dated 23 March 2009 between BCCI and WSG; and
3. THE FACILITATION FEE Payment Terms In consideration of WSG having provided the Facilitation Services, MSM hereby irrevocably and unconditionally, in accordance with the terms and conditions set out below, covenants and undertakes to pay WSG (or its nominee, provided always that MSM shall not be obligated to so pay such nominee if doing so would increase its costs or liabilities in any form, including without limitation in relation to Tax or any other taxes, levies, duties, imposts, charges or contributions) the Facilitation Fee in accordance with the following schedule:
(a) ...............
to
(j) ...............
5. BCCI TERMINATION NOTICE
5.1 WSG may at any time, without prejudice to any
other rights it may then have against MSM, provide the BCCI Termination Notice to BCCI; provided that the following conditions at both (a) and (b) below have been satisfied:
(a) either:
(i) MSM has failed to pay WSG the Facilitation
Fee in accordance with this Deed and the dates set out in ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 19 arbp978-10 Clause 3; or
(ii) MSM has failed to provide the Bank Guarantees as required under this Deed within the time frames set out in Clause 4.1, and such failure is not remedied by MSM (it being agreed that (as relevant) MSM's payment of the relevant instalment of the Facilitation Fee or provision of the Bank Guarantee shall be deemed to be an adequate remedy) within 14 days of receipt of written notice ("Remedy Period") by WSG to MSM requiring it to do so ("Notice to Remedy"); AND
(b) if MSM provides WSG with a written notice at any time during the Remedy Period that it has paid the Facilitation Fee and/or the Bank Guarantee (as appropriate) and that it disputes the Notice to Remedy, then, WSG shall, prior to providing the BCCI Termination Notice to BCCI, obtain a declaration from the arbitrator in accordance with the procedure set out in Clause 9 hereof (save that the parties irrevocably undertake and warrant that they shall request that the arbitrator reach his or her final decision and/or judgment and/or final direction to the parties as soon as possible but at all times within 30 days of reference of the matter to such arbitrator) that one of the failures set out in Clause 5.1(a)(i) and (ii) has occurred.
7.2 WSG hereby represents, warrant and undertake to MSM that:
(a) ..................
to
(f) ..................
(g) the WSG Agreement has been mutually
terminated by BCCI and World Sport Group (Mauritius) Limited."
::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 20 arbp978-10 MSM admittedly paid the petitioner a sum of `.1,25,00,000/-
towards part-payment of the facilitation fee. Clause 9 of the agreement contains an arbitration agreement.
33. The second agreement dated 25.3.2009 was entered into between MSM and the respondents in respect of the media rights for the Indian subcontinent for an increased amount of ` 4791.89 crores for the period 2009-2016 extendable to 2017. Recital "B" records that the agreement dated 21.1.2008 entered into between MSM and the respondents was agreed to be replaced by this agreement. The relevant provisions of this agreement read as under :-
"Rights Fee means the monetary amount of INR 3949.40 Crores Indian Rupees (39,494,000,000 Indian Rupees), which amount shall, if the Rights Period is extended pursuant to Clause 27 of the Agreement, increase to a total of INR 4791.89 Crores Indian Rupees (47,918,900,00 Indian Rupees) payable in accordance with the provisions of Clause 7;
Rights Period means the period commencing on the date of execution of this Agreement by both parties until 31 December 2016, unless otherwise extended in accordance with Clause 27;
WSG means World Sport Group (Mauritius) Limited, a company incorporated under the laws of Mauritius (registered number 017624C1/GBL), with its registered address at 308 James Court, St Denis Street, Port Louis, Mauritius;
WSG Agreement means the agreement between WSG and Licensee entered into on or around the date of this Agreement;::: Downloaded on - 09/06/2013 16:42:36 :::
This Order is modified/corrected by Speaking to Minutes Order 21 arbp978-10 WSG/Licensor Agreement means the agreement between WSG and Licensor entered into on or around the date of this Agreement; and WSG Notice means the written notice having a cure period of not less than 21 days issued to Licensor by WSG in accordance with the terms of the WSG Agreement stating that Licensee has failed to make payment or provide a bank guarantee in accordance with the terms of the WSG Agreement and providing the details set out in the WSG Notice form attached to the WSG Agreement.
10.4 Upon receipt of the WSG Notice by Licensor in accordance with the WSG Agreement, Licensor may immediately terminate this Agreement (without prejudice to any other rights or remedies Licensor may have against Licensee) if Licensee both: (a) fails to provide Licensor with a Confirmation Notice; and (b) fails to remedy the breach, within 21 days after receiving written notice from Licensor calling upon Licensee to remedy such breach specifying the amount if any to be paid and/or the bank guarantee, if any, to be provided by Licensee to WSG (it being agreed that Licensee's (as relevant) payment of amount then overdue or provision of the bank guarantee then overdue within such 21 day period shall be deemed as amounting to adequate remedy). For the purposes of this Clause 10.4, "Confirmation Notice" shall mean the notice signed by both WSG and Licensee confirming that the relevant payment has been made or the bank guarantee provided by Licensee to WSG."
34. The third agreement also dated 25.3.2009 was entered into between the petitioner and the respondents in respect of the media rights for the rest of the world i.e. excluding the Indian subcontinent for the period ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 22 arbp978-10 15.3.2009 to the year 2017. This agreement is the subject matter of the petition which the respondents terminated by their letter dated 28.6.2010 alleging that it was vitiated by fraud. MSM had earlier, by a letter dated 25.6.2010 terminated the agreement dated 25.3.2009 between itself and WSG-Mauritius on the same grounds. I will refer to these termination letters later in detail. The relevant provisions of the agreement read as under :-
"1. Definitions and Interpretation MSM Agreement means the agreement that is entered into by World Sport Group (Mauritius) Limited and MSM on the date of the Licensor MSM Agreement;
Rights Fee means the monetary amount of US
$87,200,000 (payable in Indian Rupees using an
exchange rate of 1 US Dollar to INR 40 Rupees) payable in accordance with the provisions of Clause 7 below;
Rights Period means the period commencing on 15 March 2009 until 31 December 2017 and comprising (i) Rights Period 2009-2012 (meaning the period commencing on 15 March 2009 until 31 December 2012,
(ii) Rights Period 2013-2017 (meaning the period commencing on 1 January 2013 until 31 January 2017);
2. RIGHTS Grant of Rights
(iii) Licensee further acknowledges and agrees that:
(a) Licensor shall be free without restriction throughout the Rights Period to itself transmit, make available and otherwise exploit, or to authorise any other persons to so do, any Television Rights and Mobile Simulcast Rights within the Indian Subcontinent on an Exclusive basis (or in Licensor's discretion on a non-::: Downloaded on - 09/06/2013 16:42:36 :::
This Order is modified/corrected by Speaking to Minutes Order 23 arbp978-10 Exclusive basis), and that during the Rights Period 2009-2016 these rights have been granted to MSM, with an option to extend the Licensor MSM Agreement to include Rights Period 2017;
27. LICENSOR MSM AGREEMENT Expiry of Licensor MSM Agreement in 2016 Termination of Licensor MSM Agreement due to Breach of MSM Agreement 27.5 Upon receipt of the MSM Notice by Licensor, if MSM both: (a) fails to provide Licensor with a Confirmation Notice; and(b) MSM fails to remedy the breach within 21 days after receiving written notice from Licensor calling upon MSM to remedy such breach specifying the amount if any to be paid and /or the bank guarantee, if any, to be provided by Licensee to WSG (it being agreed that Licensee's (as relevant) payment of amount then overdue or provision of the bank guarantee then overdue within such 21 day period shall be deemed as amounting to adequate remedy), Licensor must (in its discretion) either
(i) immediately terminate the Licensor MSM Agreement (without prejudice to any other rights or remedies Licensor may have against MSM); or
(ii) within a further 21 days after the expiry of the cure period above, pay Licensee the money or provide the bank guarantee owing to it from MSM that caused Licensee to issue the MSM Notice.
For the purposes of this Clause 27.5:
::: Downloaded on - 09/06/2013 16:42:36 :::
This Order is modified/corrected by Speaking to Minutes Order 24 arbp978-10 "MSM Notice" shall mean the written notice having a cure period of not less than 21 days issued to Licensor by Licensee in accordance with the terms of the MSM Agreement stating that MSM has failed to make payment or provide a bank guarantee in accordance with the terms of the MSM Agreement and providing the details set out in the MSM Notice form attached at schedule 3 (by way of example only).
"Confirmation Notice" shall mean the notice signed by both MSM and Licensee confirming that the relevant payment has been made or the bank guarantee provided by MSM to Licensee, the form of which is attached at Schedule 4 (by way of example only)."
35. The above agreements dated 25.3.2009 were acted upon in the second and third IPL tournaments held in the years 2009 and 2010.
36. In or about April, 2010, there appear to have been disputes and differences between the former Chairman of the Governing Council of the IPL, the said Lalit Modi and other office bearers of the respondents. According to the respondents, they came to know thereafter through media reports, about the fraud they now allege about the above agreements of 15.3.2009 and 25.3.2009.
37. By a letter dated 1.5.2010, addressed to MSM, the respondents stated that it had issued a charge sheet to the said Lalit Modi with regard to certain transactions finalized by him. One of the transactions, it was stated, was the agreement between the respondents and MSM. The letter stated that questions had been raised regarding the transactions including as to the payment of the facilitation fee to WSG-Mauritius. The ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 25 arbp978-10 respondents requested MSM to furnish the relevant correspondence and the documents leading to the said agreement.
38. By a further letter dated 30.5.2010 addressed to MSM, the respondents referred to the agreement dated 25.3.2009 entered into by them with MSM and stated: "It has come to our attention that you have entered into an agreement on the same day i.e. 25.3.2009 with M/s.World Sports Group (M) Ltd. (WSGM) ........................" The letter further stated that the respondents were not aware of any facilitation services provided by WSG-Mauritius and that the moneys expended by MSM for the Indian subcontinent rights i.e. the facilitation fee should rightly be paid to the respondents alone and to no other party. The respondents therefore, requested MSM to remit all the amounts due and payable to WSG- Mauritius to them stating that a favourable decision by MSM in this regard would help the relations between MSM and BCCI grow stronger in the years to come.
39. By a letter dated 2.6.2010 addressed to MSM, the respondents referred to an e-mail message also dated 2.6.2010 sent by MSM to the respondents and confirmed that the respondents were agreeable and would fulfill all the requests made by MSM to enable it to pay the balance amount of facilitation fee of ` 300 crores to the respondents. The respondents also advised MSM to terminate the facilitation fee contract dated 25.3.2009 entered into by it with WSG-Mauritius and to initiate proceedings for recovery of the amounts already paid thereunder i.e. ` 125.00 crores. MSM was requested to meet the respondents officer and stated that the respondents would take steps to prepare an addendum to ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 26 arbp978-10 the agreement dated 25.3.2009 entered into between MSM and the respondents "to reflect our agreement on your request".
40. MSM thereafter by a letter dated 25.6.2010 purported to terminate the agreement dated 25.3.2009 entered into by it with WSG- Mauritius. It was alleged that the underlying consideration for the agreement was the representation made by WSG-Mauritius that it had executed an agreement dated 23.3.2009 with the respondents whereunder it had been granted unfettered global media rights including the Indian subcontinent rights implying thereby as a natural corollary that the earlier media rights agreement dated 15.3.2009 between WSG-Mauritius and the respondents along with its restrictive conditions had been mutually terminated and that WSG-Mauritius could thereafter relinquish the media rights for the Indian subcontinent in favour of MSM for consideration to enable MSM to enter into a direct agreement with the respondents and that the said rights were subsisting at the time of the execution of the agreement dated 25.3.2009 between WSG-Mauritius and MSM and that WSG-Mauritius had relinquished those rights in favour of the respondents to enable the respondents and MSM to seek a direct media rights license agreement for the Indian subcontinent. The letter further stated that MSM had been recently informed by the respondents that the alleged agreement between WSG-Mauritius and the respondents dated 23.3.2009 does not exist and that in terms of clause 13.5 of the agreement dated 15.3.2009, the rights had automatically reverted to the respondent at 3.00 a.m. on 24.3.2009 and therefore, at the time of the execution of the agreement dated 25.3.2009, WSG-Mauritius did not have any rights to relinquish ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 27 arbp978-10 and/or to facilitate the procurement of the Indian subcontinent rights for the IPL from the respondents and thus no facilitation services could have been provided by WSG-Mauritius. It was alleged that the representations made by WSG-Mauritius were therefore fraudulent. The letters further stated that MSM and the respondent had executed an amendment to the agreement dated 25.3.2009 between the respondents and itself, inter-alia, by deleting clause 10.4 thereof. MSM, therefore, rescinded the agreement dated 25.3.2009 entered into by them with WSG-Mauritius and demanded the refund of a sum of ` 125.00 crores with interest at 16% per annum.
41. The respondents by a letter dated 28.6.2010 purported to terminate the agreement dated 25.3.2009 between the parties. The respondents alleged that they were never made aware of the agreement dated 25.3.2009 entered into between MSM and the petitioner's affiliate WSG-Mauritius; that the agreement was brought to the notice of the respondents by MSM only recently and that the amounts due thereunder viz. ` 425.00 crores were actually amounts due to the respondents. The letter that in the agreement dated 25.3.2009 between WSG-Mauritius and MSM, it was falsely represented that there was a license agreement between the respondents and WSG-Mauritius dated 23.3.2009.The letter further raised a grievance regarding the onerous terms contained inter-alia in clause 27.5 of the agreement dated 25.3.2009 between the respondents and WSG-Mauritius. The letter referred to a suit having been filed by MSM inter-alia against WSG-Mauritius and the petitioner seeking a refund of the said sum of ` 125.00 crores. In conclusion the letter stated :-
"Due to the all pervasive fraud that you have perpetrated ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 28 arbp978-10 on the BCCI, we hereby rescind the subject agreement with immediate effect. All the rights purportedly licensed to you hitherto shall stand vested back with the BCCI and you cannot deal with these rights in any manner. We reserve our rights to initiate both civil and criminal proceedings against you for fraud and wrongful losses at your costs and consequences".
42. The petitioner by its letter dated 30.6.2010 and by its advocate's letter dated 1.7.2010, responded to the letter of termination. By its advocate's letter dated 1.7.2010, the petitioner also invoked the arbitration clause contained in clause 29.3 and called upon the
43. respondents to nominate an arbitrator.
There is no dispute that every one of the contracts I have referred to was executed by the concerned parties. Mr.Sundaram stated that the respondents have no grievance regarding the agreements dated 21.1.2008. He submitted that even assuming that the agreements dated 15.3.2009 are valid, the three agreements dated 25.3.2009 were entered into on account of a fraud committed by the petitioner and its associate company WSG-Mauritius as stated in their letter of termination and as also stated in MSM's letter dated 25.6.2009 rescinding the agreement dated 25.3.2009 entered into between MSM and WSG-Mauritius. In other words, according to him, WSG-Mauritius fraudulently represented to MSM that there was a valid, subsisting and binding agreement between WSG- Mauritius and the respondent dated 23.3.2009 wherein WSG-Mauritius had been granted unfettered global media rights including in respect of the Indian subcontinent implying thereby, it could relinquish the same to enable MSM to enter into a direct contract with the respondents. Mr.Sundaram ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 29 arbp978-10 submitted that as on the date of the agreement, neither WSG-Mauritius nor the petitioner had any subsisting agreement/contract with the respondents in respect of the media rights for any territory. Thus neither the petitioner nor WSG-Mauritius had any right which it was entitled to relinquish. He stated that there admittedly was no agreement dated 23.3.2009 in existence. Thus the consideration of ` 425.00 crores was extracted by WSG-Mauritius and the petitioner on a fraudulent misrepresentation that there was in existence an agreement between the respondents and WSG-
Mauritius dated 23.3.2009. Mr.Sundaram submitted that the agreements were entered into fraudulently and in collusion between the chairman of the IPL sub-committee and the petitioner/ WSG-Mauritius.
44. On the other hand, Mr.Chinoy submitted that the date 23.3.2009 mentioned in the WSG-Mauritius - MSM agreement was a mere typographical error. Neither MSM nor the respondents were under a misapprehension at any point of time that there was an agreement dated 23.3.2009 either on account of any representation/misrepresentation to that effect by the petitioner or WSG-Mauritius or otherwise. He submitted that undue advantage was being taken by the respondents on account of this minor typographical error.
He further submitted that the respondents were at all material times aware of or, in any event, were in a position to ascertain and verify the contents of the said contracts right from the time they were executed.
45. If the respondents had knowledge of the agreements dated 25.3.2009 between the petitioner and itself and between MSM and itself, it would follow that they had knowledge of the agreement between MSM and ::: Downloaded on - 09/06/2013 16:42:36 ::: This Order is modified/corrected by Speaking to Minutes Order 30 arbp978-10 WSG-Mauritius of that date and the contents thereof. This is clear from the terms of these agreements expressly referred to the MSM - WSG- Mauritius agreement.
(A). Firstly, the agreement dated 25.3.2009 between MSM and the respondents defined "WSG" agreement to mean the agreement between WSG-Mauritius and MSM entered into around the date of that agreement i.e. 25.3.2009. It is nobody's case that there was any other agreement dated 25.3.2009 between WSG-Mauritius and MSM, which had been entered into on that day. Thus the reference clearly was to the agreement dated 25.3.2009 between WSG-Mauritius and MSM. If the respondents were aware of the agreements between MSM and themselves, they would thereby have and, in any event, ought to have been aware of or put to notice that there was an agreement on that very day entered into between WSG-Mauritius and MSM.
Equally, if not more important, is the fact that the agreement dated 25.3.2009 between MSM and the respondents expressly defined WSG notice to be the one to be issued in accordance with the terms of the agreement between WSG-Mauritius and the respondents of 25.3.2009. Thus not only was the agreement dated 25.3.2009 between MSM and WSG-Mauritius referred to generally but an important clause therein was expressly referred to.
(B). The agreement dated 25.3.2009 between the petitioner and the respondents is also important in this regard. This agreement defined the MSM agreement to mean the agreement entered into between WSG- Mauritius and MSM on the same day. Thus the respondents were even by ::: Downloaded on - 09/06/2013 16:42:37 ::: This Order is modified/corrected by Speaking to Minutes Order 31 arbp978-10 this agreement put to notice of the WSG-Mauritius and MSM agreement.
Clause 27.5 of this agreement leaves little room for doubt that the respondents were not only in a position to ascertain the existence and the details of the 25.3.2009 agreement between WSG-Mauritius and MSM but were in fact fully aware of the same. Clause 27.5 does not merely end with a reference to the nature of the notice but defined the notice to mean a written notice in accordance with the terms of the MSM agreement. As I noted earlier, this agreement also defined MSM agreement to mean the agreement dated 25.3.2009 between WSG-Mauritius and MSM.
A provision of vital importance in the agreement dated 25.3.2009 between WSG-Mauritius and MSM was thus expressly incorporated into the agreement between the petitioner and the respondents. Nothing could be clearer.
46. The suggestion that the references were too complex is difficult to accept. It is reasonable to presume that parties such as WSG-Mauritius, the petitioner, MSM and the respondents in matters such as these had acted with great care and deliberation and in all probability with expert advise. The agreements have obviously been prepared in great detail and with considerable care and application of mind. Anyone reading the agreement would at the very least be put to notice that there was in existence an agreement between WSG-Mauritius and MSM in or around the same time and that the same contained a provision for a written notice as contemplated in the agreement between WSG-Mauritius and MSM. It would be impossible to believe in that event that the respondents either did not know about or would have made no enquiry about the MSM - WSG- ::: Downloaded on - 09/06/2013 16:42:37 :::
This Order is modified/corrected by Speaking to Minutes Order 32 arbp978-10 Mauritius agreement of that date.
Had it been established that the respondents' officers had participated in the formation of the agreements dated 25.3.2009, it would not have been open to the respondents to say that they were unaware of the existence or the terms and conditions of the agreement dated 25.3.2009 between MSM and WSG-Mauritius. For the cross-references in the other two agreements dated 25.3.2009 are clear and it would have been reasonable to presume that parties such as these were aware of the terms and conditions of each of the agreements.
47. The matter, however, does not rest there. The question is whether the respondents officers, other than the said Lalit Modi had participated in the formation or the execution of the contracts or had anything to do with them subsequently or were aware of and had endorsed the agreements dated 25.3.2009.
48. Mr.Sundaram stated that the agreements dated 25.3.2009 were entered into collusively between the said Lalit Modi and the petitioner/ WSG-Mauritius. He submitted that the said Lalit Modi was the only person involved in the matter as is evident from the fact that he is a signatory to all the agreements. He reiterated what is stated in paragraph 8 of the affidavit in reply that the respondents came to know these facts only through the media reports. Thereupon the respondents scrutinized the contracts and were shocked to notice the provisions thereof especially clauses 10.4 and 27.5. It is averred that all these clauses were unauthorized and came to the knowledge of the present Honorary Secretary and other office bearers of the respondents as well as the members of the IPL Governing Council, ::: Downloaded on - 09/06/2013 16:42:37 ::: This Order is modified/corrected by Speaking to Minutes Order 33 arbp978-10 other than the said Lalit Modi only by that time and not earlier. It is averred in paragraph 9 of the affidavit-in-reply that these contracts were never placed before and were neither approved nor ratified by the IPL Governing Council.
49. I am unable to discard this defence without the benefit of further evidence especially the oral testimony of certain key figures. The fact is that the said Lalit Modi had signed all the contracts and addressed correspondence of vital importance pertaining to the controversy. There is nothing on record which indicates the involvement of the respondents or any of the members of the IPL sub-committee other than the said Lalit Modi in the negotiations or formation of the contracts dated 15.3.2009 and 23.3.2009. Nor is there anything of such significance as to establish that the respondents had notice of these agreements at the material time which would persuade me to hold at the inter-locutory stage that the case is so clear as to not require anything more to establish it.
50. Mr.Chinoy relied upon the minutes of a meeting of the IPL's Governing Council dated 11.8.2009 which were, in fact, annexed by the respondents to their affidavit in reply. The meeting was chaired by the said Lalit Modi and was attended by ten other members of the Governing Council including the President, Honorary Secretary, Honorary Joint Secretary, Honorary Treasurer of the respondents and the Vice Chairman and three members of the Governing Council of the IPL. It was also attended by nine other persons. Item 6 of the minutes of the meeting pertained to the accounts for the year 2009. Sub-item (f) thereof read: ::: Downloaded on - 09/06/2013 16:42:37 :::
This Order is modified/corrected by Speaking to Minutes Order 34 arbp978-10 "f) - Approval of all vendor contracts for 2009 season".
All contracts entered were approved. (List attached as Annexure "A", Annexure "C")."
Annexure "C" contained 15 items. Items 14 and 15 thereof read as under :-
"14. MSM Satellite and BCCI.
15. IPL- BCCI and WSG."
51. Mr.Sundaram submitted that the reference to the agreements was vague, without any particulars and was in an extremely guarded manner with a view to conceal the existence of the agreements. He submitted that agreements as important as these should have been given prominence in the minutes, whereas they have been mentioned only in the appendix under the caption of "accounts for the year 2009". In the affidavit in reply, it is averred that the minutes were prepared by the said Lalit Modi himself and that the contracts were never placed before the IPL Governing Council and that none of the members had any occasion to go through the contracts since they had been filed in the caption "vendor contracts"; that the media rights license agreements cannot classify as vendor contracts and that thereby the existence of the contracts was suppressed by the said Lalit Modi with a view to cheat the respondents and that the contracts were never approved or ratified by the IPL Governing Council and therefore cannot be enforced against the respondents.
52. Mr.Sundaram's submissions, at the very least, persuade me to hold at this stage, that the said minutes are not conclusive of the question. In fact, the minutes may well support the respondents' case that the ::: Downloaded on - 09/06/2013 16:42:37 ::: This Order is modified/corrected by Speaking to Minutes Order 35 arbp978-10 manner in which agreements such as these have been tucked into a corner indicate an intention to avoid scrutiny by others. The minutes by themselves do not conclusively establish the respondents' knowledge of the agreements. Only oral evidence will give the court or tribunal a clearer picture.
53. Mr.Chinoy's reliance upon the affidavit of the said Srinivasan in the infringement suit filed in the Delhi High Court stands on a higher footing. MSM had filed C.S. (O.S.) No.633 of 2009 against a third party to restrain it from infringing the rights granted to MSM under the agreement dated 25.3.2009 entered into by it with the respondents stands on a higher footing.
In an interim application taken out in that suit, the said N. Srinivasan, Honorary Secretary of the respondents who had also attended the meeting of the Governing Council of the IPL held on 11.8.2009 referred to earlier, filed an affidavit dated 11.4.2009. In paragraphs 2 and 3 thereof, he stated as under :-
"2. I say that I am aware of the agreement entered into between the Plaintiff herein and the Board of Control for Cricket in India dated March 25, 2009 and have read and perused the contents thereof.
3. I say and confirm that as per the said agreement, Plaintiff has been granted the sole and exclusive rights to produce and communicate the public by way of broadcast, the cinematograph films carrying the cricket matches to be played as part of the Indian Premier League cricket tournament. Thus, the Plaintiff is the exclusive licensee in respect of the rights of reproduction and communication to the public of the said cinematograph film works in terms of the said agreement."
The said Srinivasan has filed the affidavit in reply in this ::: Downloaded on - 09/06/2013 16:42:37 ::: This Order is modified/corrected by Speaking to Minutes Order 36 arbp978-10 petition. He is the Honorary Secretary of the respondents. It is not his case that what he stated in the affidavit, filed in the Delhi High Court, is false or incorrect. Nor has he stated that he made the statements in that affidavit without studying the said agreement dated 25.3.2009. I see no reason why this Court should then presume that the said Srinivasan's affidavit filed in the Delhi High Court was incorrect.
54. The onus will undoubtedly rest heavily upon the said Srinivasan at the trial to explain the affidavit. While it would be improper on my part to speculate upon any explanation that he may offer, I cannot presume that no explanation is possible. The affidavit was made in respect of an infringement action and the terms of the agreement dated 25.3.2009 which fall for consideration in this petition were not relevant to that litigation. Undoubtedly, the said Srinivasan will have to explain how and when and in what circumstances he was made aware of the said agreement before he referred to it in the said affidavit. He must explain the inaction for over a year thereafter.
55. However, various other facts which I have referred to and which I will hereafter refer to would lead to the conclusion that the said Srinivasan's affidavit is but a factor to be weighed in the balance while deciding the rival claims. Considering the facts of the case and the nature of the reliefs sought and the consequences of the grant thereof, this affidavit by itself cannot sustain this petition.
56. In the circumstances, I cannot without anything more, come to conclusion that the respondents were in fact aware of the agreements dated 15.3.2009 and 25.3.2009 at all material times. ::: Downloaded on - 09/06/2013 16:42:37 :::
This Order is modified/corrected by Speaking to Minutes Order 37 arbp978-10
57. This brings me to Mr.Chinoy's contention that the reference to the agreement dated 23.3.2009 in the agreements dated 25.3.2009 is a mere typographical error which is now sought to be made the basis of an allegation of fraud. The contention that it was a typographical error had been taken even earlier in the suit filed by MSM which I will refer to shortly.
Mr.Chinoy submitted that it was nobody's case that there was an agreement dated 23.3.2009. Neither MSM nor the respondents in the correspondence and in the press statement referred to any such agreement. They were aware that there was no agreement dated 23.3.2009 and that it must therefore be presumed that they were also aware of the fact that the date 23.3.2009 was a mere typographical error.
58. It is difficult to accept this contention at the interlocutory stage. The reference in the MSM - WSG-Mauritius agreement to an agreement dated 23.3.2009 cannot be considered to be a typographical error.
59. There is no significance or connection between the date 23.3.2009 and any other document in regard to any of these transactions. Nor is there any connection between the date 23.3.2009 and any event in connection with or related to any of these transactions. Prima-facie it appears that the date was consciously mentioned.
60. This, prima-facie, inference is fortified by three e-mails sent in quick succession by the said Lalit Modi to various broadcasters including NDTV, ESPN, SONY and STAR NEWS. It is important, for reasons I will shortly mention, to note that each of the e-mails was also sent to the petitioner, WSG-Mauritius and MSM.
61(A). The first e-mail message dated 23.3.2009 which was sent at ::: Downloaded on - 09/06/2013 16:42:37 ::: This Order is modified/corrected by Speaking to Minutes Order 38 arbp978-10 10:13 AM GMT (3:45 p.m. Indian Standard Time) to the various broadcasters including MSM, reads as under :-
"Friends BCCI will close with one rights holder by 8 pm tonight. The courts have allowed us to do the same with anyone, any deal. This is for your information.
Warm regards Lalit Modi Chairman and Commissioner IPL."
(B). I have held earlier that this e-mail militates against the oral understanding alleged between MSM and WSG-Mauritius/the petitioner on 19.3.2009. This e-mail also indicates that the date 23.3.2009 in the MSM -
WSG-Mauritius agreement was not a typographical error. It states that an agreement was going to be arrived at that very night by the respondents with a party.
62(A). The next e-mail message dated 23.3.2009 which was addressed by the said Lalit Modi at 11:37 AM GMT (5:07 p.m. Indian Standard Time), reads as under :-
"Subject: Wsg contract.
Dear Friends As time is of essence and further due to flux of time and as I have to head to South africa, and England this evening, you all are aware we have a Global rights agreement with WSG. We were waiting for he court verdict and were barred from signing any thing new till the verdict was pronounced. Now that the verdict has come and we are free to do what we want - we have just signed a new agreement with WSG and removed basically any further ::: Downloaded on - 09/06/2013 16:42:37 ::: This Order is modified/corrected by Speaking to Minutes Order 39 arbp978-10 approvals from us. In essence WSG now owns global rights to IPL for the next 9 years and do not need to come back to us for any further approvals. They are further free to either sub license or broadcast the same on any channel/ channels globally. Or enter into a deal with any company or investor group globally to exploit the same on any channel or channels globally. They are further free to sub license it on any term they think fit as along as it conforms to our agreement.
If you have any queries please be in touch with WSG.
Warm regards Lalit Modi Chairman and commissioner IPL.
Sent from BlackBerry® on Airtel" [emphasis supplied] (B). This e-mail message is a strong indication that the date 23.3.2009 was not a mere typographical error. It was clearly and expressly not merely represented, but stated in the e-mail that the respondents had a global rights agreement with the petitioner and that as the Court verdict had come in the respondents' favour, the respondents "have just signed a new agreement with WSG". The language is clear and unequivocal. It is a representation that an agreement had been "signed" on the very day after the judgment was pronounced viz. 23.3.2009. The use of the words "just signed a new agreement" leaves little room for doubt in this regard. This militates against the theory of a typographical error.
63(A). The third e-mail dated 23.3.2009, which was addressed at 12:01 PM GMT (5:30 p.m. Indian Standard Time) to the said broadcasters, reads as under :-
"Ajit/Vikram ::: Downloaded on - 09/06/2013 16:42:37 ::: This Order is modified/corrected by Speaking to Minutes Order 40 arbp978-10 As the court verdict has come in favour of BCCI - and we are free to give our Broadcast rights to anyone now, We have signed a New Master rights agreement with WSG. They are now free to broadcast/sell/use themselves or sub license the same to any broadcaster in the world.
You are authorised as discussed to transfer all bookings on IPL live telecast to the channel they ask without further approval from me. I have also told them to ensure that whatever commitments were made to existing sponsors on Sony - that they must adhere to the same. Vodafone and Pepsi I have directly spoken to and am asking sundar to liase with all the rest thru you on other agencies.
As I am leaving the country tonight your main point person will be Vinu Nair from WSG.
Warm regards Lalit." [emphasis supplied] (B) The second sentence of the e-mail message uses the same expression as in the second e-mail message referred to above viz. that the respondents had "signed" a new master rights agreement with the petitioner/ WSG-Mauritius the very day i.e. 23.3.2009. What I said about the e-mail message dated 23.3.2009 addressed at 11:37 AM GMT applies to this e-mail message as well.
64. I am therefore unable to accept Mr.Chinoy's contention that the reference to the date 23.3.2009 is a mere typographical error. Not only was it not a typographical error, it was a clear representation made by the said Lalit Modi that the respondents had not merely orally agreed to but had executed an agreement in writing - "signed a new master rights agreement with WSG". This representation was reinforced by the concerned recipients thereof viz. the petitioner and WSG- ::: Downloaded on - 09/06/2013 16:42:37 :::
This Order is modified/corrected by Speaking to Minutes Order 41 arbp978-10 Mauritius not having denied the same.
65. I cannot therefore, rule out the possibility that MSM who was one of the recipient's of the e-mail message presumed that there was an agreement dated 23.3.2009 and therefore, accepted the statement in the agreement dated 25.3.2009 that there was an agreement dated 23.3.2009.
If indeed a new agreement had not been signed on 23.3.2009, the petitioner/WSG-Mauritius, to whom also the e-mail message was addressed would have clarified or corrected the same in reply. The fact that they did not do so, indicates that they allowed the representation to be made that an agreement had been entered into in their favour with the respondents on 23.3.2009.
66. Mr.Chinoy placed strong reliance upon a press statement issued by MSM. He stated that MSM itself could never have been under a misapprehension about an agreement dated 25.3.2009. He submitted that this is evidenced by the fact that the detailed press statement refers only to an agreement dated 15.3.2009 and not to an agreement dated 25.3.2009.
In response to media reports speculating on the alleged irregularities of the IPL broadcaster rights owned by MSM, MSM issued a press statement. Paragraphs 2, 4 and 5 under the caption "Quick Summary" and paragraphs 2 and 5 under the caption "March 2009 - Renegotiation of IPL Broadcasting Rights" of the press note read as under:- ::: Downloaded on - 09/06/2013 16:42:37 :::
This Order is modified/corrected by Speaking to Minutes Order 42 arbp978-10 "A quick summary
2. MSM immediately initiated legal action against the BCCI in the Bombay High Court to stay the termination. However, BCCI had vested the Indian subcontinent broadcasting rights with WSG Mauritius, for a nine year period (2009-2017) under an agreement dated 15 March 2009.
4. MSM's goals in the commercial negotiation were two-fold: i) to secure the rights that had been unilaterally terminated and for the entire 9 year period keeping BCCI unaffected by paying the same amount to BCCI as contracted by WSG Mauritius, and ii) It was MSM's clear position that to secure its business interests, the broadcasting rights agreement should be a direct contract with the BCCI, rather than as a sub-license under an agreement with WSG Mauritius, which had these rights, as per the agreement with BCCI dated March 15, 2009. To facilitate MSM's condition for a direct contract with BCCI, WSG Mauritius agreed to give up its broadcast rights for the Indian subcontinent in favour of MSM, thus paving the way for BCCI & MSM to enter into a contract directly. In consideration for this, MSM agreed to pay WSG Mauritius a facilitation fee.
5. MSM wishes to re-emphasize here that the 'Facilitation Fee' of Rs.425 crores to WSG Mauritius is for :
a. the original option fee of $25million
(Rs.115 crores approximately) to extend the
rights to years 6 till 10,
b. an additional fee over the 9 years of
the contract of Rs.310 crores. These fees were to compensate WSG Mauritius for returning its rights for IPL season 2 - 10 to BCCI in favour of MSM and were necessary if MSM was to secure the rights to IPL season 2-10. However, the potential rating incentive at the end of year 5 of $35 million (Rs.160 crores) under the agreement dated 21 January 2008 was ::: Downloaded on - 09/06/2013 16:42:37 ::: This Order is modified/corrected by Speaking to Minutes Order 43 arbp978-10 eliminated, and c. as a consequence of these commercial negotiations the net incremental amount attributable to WSG Mauritius giving up its IPL Indian subcontinent rights is Rs.150 crores.
March 2009 - Renegotiation of IPL Broadcasting Rights
2. MSM immediately initiated legal action against the BCCI in the Bombay High Court to stay the termination. However, BCCI had vested the Indian subcontinent broadcasting rights with WSG Mauritius, for a nine year period (2009-2017) under an agreement dated 15 March 2009.
5. Intense commercial negotiations ensued with other broadcasters also expressing interest making the situation extremely competitive. After protracted negotiations between MSM, WSG Mauritius and BCCI, MSM entered into a renegotiated agreement on the IPL broadcasting rights with the BCCI at the same consideration offered by WSG Mauritius and for the same duration (9 years), in lieu of WSG Mauritius relinquishing its rights, thereby achieving both its goals."
While this could be a relevant submission qua MSM, it cannot be conclusive against the respondents. Further, the mere absence of a reference to the agreement dated 23.3.2009 is not conclusive of the matter. This was a press statement. I cannot read it as strictly as suggested by Mr.Chinoy. The press statement did not analyze the rival cases.
67. There admittedly was no agreement in writing entered into between the petitioner and the respondents or between the respondents and WSG-Mauritius between 3:00 a.m. on 24.3.2009 i.e. the expiry of the extended period stipulated under the agreement dated 15.3.2009 and the ::: Downloaded on - 09/06/2013 16:42:37 ::: This Order is modified/corrected by Speaking to Minutes Order 44 arbp978-10 execution of the agreements dated 25.3.2009.
Thus prima-facie, when the agreements dated 25.3.2009 were entered into, neither the petitioner nor WSG-Mauritius had any right which they could have surrendered. The petitioner would have to establish its case of an oral arrangement having been arrived at on 19.3.2009. A relief of the nature sought in this arbitration petition cannot be granted in such a case.
68. There is nothing on record which indicates any arrangement between the respondents and the petitioner or WSG-Mauritius. Nor is there anything on record that indicates the participation of the respondents in the formation or the execution of the agreements dated 25.3.3009. In my opinion, therefore, evidence would be required to establish the petitioner's case that the agreement was bona-fide and genuinely entered into not merely with the said Lalit Modi in his personal capacity but as acting with authority for and on behalf of the respondents.
69. The only piece of evidence which is strongly in favour of the petitioner is the affidavit filed by said N. Srinivasan in the Delhi High Court. I will assume that this is a fact which tilts the balance at this stage in favour of the petitioner as it constitutes an admission by the affiant of his knowledge of the agreement in April, 2009 when the affidavit was filed. The agreement was thereafter performed for about a year before being terminated. However, considering the facts and circumstances of this case,I am not inclined to grant the nature of the reliefs sought in this arbitration petition. Let me explain.
70. In view of the affidavit filed by the said N. Srinivasan in Delhi ::: Downloaded on - 09/06/2013 16:42:37 ::: This Order is modified/corrected by Speaking to Minutes Order 45 arbp978-10 High Court, I may have been inclined to grant an injunction if it was merely a question of preserving the property in dispute, such as in the case of a suit for specific performance of an agreement to sell property. An injunction in such a matter however, would not drastically alter the status-quo during the pendency of the proceedings.
71. However, in the present case, the injunction, if granted, would virtually amount to granting specific performance with the Court being unable to restore the status-quo ante in the event of the petitioner being unable to establish the agreement.
72. Mr.Chinoy submitted that even accepting the respondents allegation of fraud to be established, the petitioner would be entitled to reliefs in view of the Exception to section 19 of the Indian Contract Act, 1872. Sections 17 and 19 of the Indian Contract Act read as under :-
"17. `Fraud' defined.- `Fraud' means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:-
(1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true; (2) the active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any intention of
performing it;
(4) any other act fitted to deceive;
(5) any such act or omission as the law
specially declares to be fraudulent.
Explanation.- Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the case are such that, regard being had to them, it is the duty of the person keeping silence to speak, or unless his silence, is, in itself, equivalent to speech.::: Downloaded on - 09/06/2013 16:42:37 :::
This Order is modified/corrected by Speaking to Minutes Order 46 arbp978-10 .......................
19. Voidability of agreements without free consent. - When consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused.
A party to contract, whose consent was caused by fraud or misrepresentation may, if he thinks fit, insist that the contract shall be performed, and that he shall be put in the position in which he would have been if the representations made had been true.
Exception.- If such consent was caused by misrepresentation or by silence fraudulent within the meaning of section 17, the contract, nevertheless, is not voidable, if the party whose consent was so caused had the mean of discovering the truth with ordinary diligence.
Explanation.- A fraud or misrepresentation which did not cause the consent to a contract of the party on whom such fraud was practised, or to whom such misrepresentation was made, does not render a contract voidable."
73. Mr. Chinoy submitted that it is not the respondents case that any of the agreements was not available in the respondents records. The respondents officers were, therefore, at all times in a position to discover the alleged fraud. In view of the Exception to section 19, therefore, the contract was, in any event, not voidable.
74. Section 19 would not come to the petitioner's rescue if I were to assume that there was a fraud and collusion between the said Lalit Modi and the petitioner/WSG-Mauritius for two reasons.
75. Firstly, the mere fact that a document fraudulently entered into is placed on the records of an organization would not by itself warrant an inference that the concerned officers of the organization had the means of ::: Downloaded on - 09/06/2013 16:42:37 ::: This Order is modified/corrected by Speaking to Minutes Order 47 arbp978-10 discovering the truth with ordinary diligence. Organizations, such as the respondents would understandably have voluminous records. Members of an organization do not necessarily go through every document in this voluminous record without any reason and as a matter of course or practice. They would do so as and when a question arises or the document is required for a particular purpose. A view to the contrary would enable officers of organizations to play a fraud upon the organization with ease. All they would have to do after entering into a fraudulent transaction collusively with another, is to place the document somewhere in the record knowing full well that nobody is expected to peruse the records of the organization. It is not the duty of the officer of an organization to go through every document in the records of the organization. It must be established in each case whether the truth could have been discovered with ordinary diligence. What is ordinary diligence must equally depend on the facts of each case. The mere placing of a document on record of a company, society or other such organization does not lead to the conclusion that every officer thereof had the means of discovering the truth merely by virtue of the document being on the records.
76. Secondly, it is a moot point whether the Exception to section 19 applies in a case where there is a fraud committed by an officer of an organization in collusion with a third party. There is authority for the proposition that the Exception to section 19 is limited to cases where consent is caused by silence fraudulent within the meaning of section 17. There is authority for the proposition that the phrase "fraudulent within the meaning of section 17" in the Exception to section 19 applies to the word ::: Downloaded on - 09/06/2013 16:42:37 ::: This Order is modified/corrected by Speaking to Minutes Order 48 arbp978-10 `silence' exclusively and not to the word `misrepresentation'. It has also been held that cases of fraud by active misrepresentation as defined in section 17 clause 2 will not be covered by the Exception.
See for instance AIR 1939 Cal. 473 (DB) John Minas Apcar v. Louis Caird Malchus, and AIR 1931 Allahabad 154 Niaz Ahmad Khan and Anr. v. Parsottam Chandra and Anr. (DB).
However, as these authorities were not cited on behalf of the respondents during the hearing, I do not wish to express a final view on this aspect of the matter, although I did bring the same to the notice of the counsel on both sides before pronouncing the judgment. Suffice it to state that even for this reason, it cannot be said with any degree of certainty that the petitioner's case would be covered by the Exception to section 19 if the respondents are able to establish the fraud alleged by them.
77. Mr.Chinoy submitted that in view of the agreement dated 15.3.2009 between MSM and the respondents, the latter gained an amount of ` 1700.00 crores. This aspect would not determine the outcome of the petition. Neither party did the other a favour. As Mr. Sundaram rightly pointed out, the petitioner and WSG-Mauritius were interested in getting back the media rights for the Indian subcontinent for the unexpired term under the MSM-respondent agreement dated 21.1.2008 i.e. for the years 2009 to 2012. As he rightly pointed out, the media rights for the Indian subcontinent are far more valuable than for the rest of the world. For example, for the period 2013 to 2017, the value for the media rights for the rest of the world was US $ 62 million, whereas the value for the media rights for the Indian subcontinent during that period was US $ 551 million. I ::: Downloaded on - 09/06/2013 16:42:37 ::: This Order is modified/corrected by Speaking to Minutes Order 49 arbp978-10 cannot rule out the possibility, therefore, that it is for this reason that the petitioner and WSG-Mauritius agreed to the termination of the agreements dated 21.1.2008 in the hope that they would be able to strike a favourable bargain for the period 2009-2013 for the media rights for the Indian subcontinent. Under the agreement dated 21.1.2008, the only assurance was that the respondent would enter into good faith negotiations for the unexpired term of the MSM-respondent agreement.
78. Moreover, there was an enormous gain in terms of advertising time on account of additional "Time Out" provided under clause 5.13 of the agreement dated 25.3.2009 between MSM and the respondents. Clause 5.13 reads as under:-
"Time Out 5.13 Licensor undertakes, represents, warrants and agrees that:
(a) each innings of each Match shall, in addition to those breaks included within Matches during the 2008 IPL season and other customary breaks in play, include a Time Out of at least seven and a half (7 ½ minutes), subject to and in accordance with the provisions of the Appendix hereto; and
(b) each such Time Out shall be reflected in the corresponding Feed, such that (subject to and in accordance with the provisions of the Appendix hereto which are hereby agreed by the parties) at least five (5) minutes of commercial advertising time is made available to Licensee per each such Time Out (to be exploited as Licensee in accordance with the terms of this Agreement (either by itself and/or by selling and/or licensing all and/or any part thereof to one or more third parties) and Licensee ::: Downloaded on - 09/06/2013 16:42:37 ::: This Order is modified/corrected by Speaking to Minutes Order 50 arbp978-10 shall retain all revenues therefrom without further recourse to Licensor).
The concept was contemplated even at the time of the 15.3.2009 agreements. There were thus commercial decisions based on hard bargaining even assuming the 15.3.2009 contracts to be bona-fide.
79. Mr. Chinoy submitted that there was no question of WSG- Mauritius agreeing or allowing the contract to lapse for want of a broadcaster. He stated that these are very valuable rights and it is impossible to even think that WSG-Mauritius would not have been in a position to get another broadcaster even if MSM had not agreed to a non direct transaction. He stated that on a balance of probability this was virtually impossible.
I see the force of this submission. But equally I cannot ignore the fact that a transaction with a broadcaster had to be concluded within a very short period of time viz. seventy two hours. Thus, although I do not rule out the possibility of the parties having agreed not to further extend the seventy two hour period in order to enable the concerned parties to structure the entire detail, I am afraid I cannot presume that to be so at this stage without further evidence.
80. Let me presume that on the basis of the record as it stands at the interlocutory stage, the scales tilt in the petitioner's favour, even so, I would refuse interim reliefs.
81. Firstly, it would be clear by now that this is not an open and shut case. The trial would unfold a clearer picture. The grant of an injunction would virtually grant the petitioner, specific performance of the ::: Downloaded on - 09/06/2013 16:42:37 ::: This Order is modified/corrected by Speaking to Minutes Order 51 arbp978-10 agreement making restitution difficult in the extreme if not virtually impossible in the event of the agreement not being ultimately upheld by a court or arbitral tribunal. On the other hand, the difficulty, if any, in computing the damages in favour of the petitioner is considerably less. For instance, the amount that the respondents receive upon the media rights being auctioned again would itself give an indication of a major head of damages. Contracts entered into by the licensees in turn would also furnish such an indication.
82. According to the petitioner, it has granted sub-licenses in relation to the media rights excluding the territory of the Indian subcontinent to the third parties listed in Exhibit "M" to the petition. He submitted that a refusal of an injunction would prejudice the rights of third parties and expose the petitioner to claims by them.
83. It is not necessary to decide this issue as Mr.Sundaram gave an undertaking to the court that the respondents would honour all the contracts entered into by the petitioner with third parties. The undertaking is accepted.
84. It is clarified that whether the respondents are entitled to permit or not the petitioner's participation in the fresh tenders is kept open.
85. Mr.Sundaram placed considerable reliance upon the judgment of a Division Bench of this court dated 17.9.2010 in MSM Satellite (Singapore) Pte. Ltd. vs. World Sport Group (Mauritius) Ltd., in Appeal (Lodg.) No.534 of 2010 in Notice of Motion No.1809 of 2010 in Suit No. 1828 of 2010 to contend that the present disputes between the parties cannot be referred to arbitration.
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86. MSM had filed Suit (Lodg.) No.1092 of 2010 against WSG-
Mauritius, the petitioner and the respondents for a declaration that the agreement dated 25.3.2009 between WSG-Mauritius and itself was illegal, null and void; for an injunction restraining the respondents from issuing a termination notice on the basis of the agreement between the petitioner and the respondents and for the refund of the sum of `.125 crores being part-payment towards the facilitation fee of `.425 crores with interest.
MSM also filed Suit No.1828 of 2010 referred to above. In that suit, WSG-Mauritius had invoked the arbitration clause under the agreement dated 25.3.2009 between itself and WSG-Mauritius. MSM sought an injunction restraining WSG-Mauritius from referring the disputes to arbitration. MSM's Notice of Motion No.1809 of 2010 for an interim injunction was dismissed by the learned single Judge. It is against that order that the said Appeal (Lodg) No.534 of 2010 was filed in which the judgment dated 17.9.2010 was pronounced. The Division Bench allowed the appeal. WSG-Mauritius was restrained from continuing with the arbitration proceedings subject to its depositing `.300 crores in this court.
87. Mr.Sundaram placed considerable reliance upon several observations of the Division Bench, mainly to the effect that the agreement dated 25.3.2009 between WSG-Mauritius and MSM was not a stand alone agreement and that the various contracts were inter-connected and inter- related. He submitted that the Division Bench having held that the disputes pertain to one of these inter-related contracts ought not to be referred to arbitration, it follows that the disputes between the parties to this petition also cannot be referred to arbitration.
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88. Considering the view I have taken on the facts of this case, it is not necessary to decide the effect of the judgment of the Division Bench in this matter. The question whether the disputes between the parties in the present case can or ought to be referred to arbitration is kept open to be decided in any proceeding that the parties may adopt for enforcing the arbitration agreement.
89. In the circumstances, the petition is dismissed.
There shall be no order as to costs. The respondents, however, shall not invite tenders for the said media rights upto and including 17.1.2011.
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