Telangana High Court
Arha Media And Broadcasting Pvt. Ltd. vs Firstlight Media Limited on 14 October, 2024
Author: T. Vinod Kumar
Bench: T. Vinod Kumar
THE HON'BLE SRI JUSTICE T. VINOD KUMAR
I.COM.A.O.A. No.2 of 2024
ORDER:
This application has been filed under Section 9 of the Arbitration and Conciliation Act, 1996 to grant the following reliefs:
"a) An order and injunction restraining the Respondent (whether by itself or through officers, employees, staff members, servants, agents, or any person claiming through or under them) in any manner withdrawing its services under the Amended and Restated SOW-2 and/or the Master Service Agreement without providing Transitional Services as per Clause 18 read with Clause 4.3 of the Master Services Agreement and Clause 13 of the Amended and Restated SOW-2 including by handing over all binaries, Client technology and all client related data as contemplated under Clause 4.3 of the Master Services Agreement to the Claimant;
b) An order and injunction restraining the Respondent (whether by itself or through officers, employees, staff members, servants, agents, or any person claiming through or under them) in any manner acting on or giving effect to the Notice of Termination dated 10th August issued by the Respondent purporting to terminate the Amended and Restated SOW-2;
c) This Hon'ble Court be pleased to grant ad interim reliefs in terms of prayer clauses (a) to (b) above;
d) This Hon'ble Court be pleased to make provision for the costs of this Petition; and
e) This Hon'ble Court be pleased to make and pass such further and/or other orders or grant such other reliefs as this Hon'ble Court may deem fit and proper, in the facts and circumstances of the case."
2. Heard Sri S Niranjan Reddy learned Senior Counsel appearing on behalf of Sri K.V. Rusheek Reddy, learned Counsel 2 for the applicant and Sri S. Sarangi along with K. Suyodh Reddy learned Counsel for the respondent and perused the record. CONTENTIONS OF THE APPLICANT:
3. The case of the applicant is that it is in the business of procurement, development, distribution and dissemination, broadcasting/rebroadcasting of entertainment programs such as cinematograph feature films, serials, talent hunts, reality shows talk-show series, documentaries etc; that the above programs are undertaken primarily in the Telugu and Tamil languages; that the applicant undertakes the airing of the aforesaid programs through its OTT (Over-the-Top ) platform named 'Aha'; and that the content of the aforesaid programme is available both domestically in India and internationally.
4. It is the further case of the applicant that in order to undertake the aforesaid activity, it had availed the services of the respondent who is engaged in the business of providing end- to-end managed services for the distribution of premium video to IP connected devices through its cloud native platform which powers video services to streaming providers across the globe.
5. According to the applicant, a Letter of Intent (LOI) was executed between the applicant and the respondent on 10.03.2021 defining the understanding, it had with the 3 respondent in relation to the services to be provided by proposing to enter into a Master Service Agreement (MSA); and that after about 10 days from the date of entering into LOI, a Master Service Agreement was entered into by it with the respondent on 20.03.2021 for providing software and services for as detailed in the MSA.
6. It is contended that under the MSA, the respondent had agreed to grant licensable right to use, exploit and access its proprietary software titled as 'First light OTT video platform' including its backend software and front-end application, apart from providing support services namely 'implementation services' and 'managed services' as may be agreed between them which are to be detailed in written statements of work (SOW) entered into from time to time; that, as per MSA, the term for providing implementation services had commenced from 20.03.2021 viz., the date of entering into MSA and is to continue for a period of 4.5 months i.e., 01.08.2021, which is also the date of 'Aha 2.0 go live date'. The scope of implementation services that were agreed to be provided had been detailed in SOW-1 dated 22.03.2021 and the SOW would commence on 22.03.2021 (SOW effective date) and would 4 continue till 31.07.2021 and / or till the obligations of both the parties are completed.
7. It is the further case of the applicant that as per MSA, the respondent had agreed to provide managed services; that the term for the managed services was agreed to commence from the 'Aha 2.0 go live date' to be continued for a period of 3 years (MS SOW Initial Term) from such date; that by SOW-2 dated 27.08.2021, entered into in relation to scope of software licenses and managed services the term of 3 years was agreed to commence from 15.10.2021 ('aha 2.0 go live date'); that by Amended and Restated SOW-2 dated 01.11.2023, the term of 3 years (initial term) shall be deemed to have commenced from 16.11.2021 ('Aha 2.0 go live date'); that the term of 3 years in relation to managed services would commence from the amended and restated date of SOW-2; and that by virtue of the covenants would get incorporated into the MSA which did not specify any particular date, but has been specified as to commence from the 'Aha 2.0 go live date'.
8. Further, applicant contends that though the MSA provides termination, various eventualities have been contemplated, for which different notice periods have been specified; that the respondent by issuing notice dated 5 09.08.2024 sought to terminate the MSA by giving 30 days notice, contrary agreed terms: that issuance of 30 days notice is contemplated only in case of breach; and that the notice dated 09.08.2024 does not indicate or allege of any breach and the applicant failing to remedy the same within 30 days, whereby the respondent could claim to have resorted to termination of the MSA with shorter period of notice.
9. It is also the further case of the applicant that if the term of the MSA was getting expired due to efflux of time, there was no need to issue the Notice of termination; that the respondent being fully aware and conscious of the fact that the validity of the term of the MSA got extended up to 15.11.2024; that for the said reason the respondent had issued Notice of termination dated 09.08.2024 by giving 30 days period, which is not in consonance with the terms of the MSA; and thus, the notice of termination is not valid.
10. Further, according to the applicant, as per the MSA, the terms have to be read into SOW and vice versa and therefore the 'Aha 2.0 go-live date' viz., 16.11.2021 would get incorporated into MSA. The applicant thus, contends that on account of the incorporation of the go-live date into MSA, the respondent is required to provide transitional service as defined in the MSA 6 required by it on such terms and fees mutually agreed; and that for the said purpose applicant had issued 90 days advance notice dated 16.08.2024 requesting the respondent to provide the transitional service for a period of 180 days from 16.11.2024 till 15.05.2025.
11. According to the applicant, while the respondent by its response communication dated 29.08.2024 has communicated it's readiness to provide transitional services from 16.11.2024, however, based on an incorrect understanding, is claiming that the MSA had expired and they would not be in a position to provide services under SOW from 09.09.2024 to 16.11.2024. It is also contended by the applicant that though the MSA provides for resolution of disputes by reference to Arbitration, since the respondent by the above mentioned communication it's intention to stop providing services, resulting in disruption of OTT service being provided by the applicant to its customers, the same cannot be granted by the Arbitrator before the parties refer the matter to arbitration and thus seeks for grant of mandatory injunction.
12. Applicant further contends that having regard to the terms of MSA, the same is not determinable in its very nature, as on expiry / termination also the managed services are 7 required to be provided for a further period and thus, the respondent cannot claim that by virtue of Section 14(1(d) of the Specific Relief Act, 1963, it is not Specifically enforced in order to maintain the present petition.
13. In support of the aforesaid contentions, reliance is placed on the decisions rendered in Uma Devi Nambiar & Ors Vs. T.C. Sidhan (dead) 1, You Broadband India Private Limited Vs. Madhya Gujarat Vij Company Ltd 2, You Broadband India Private Limited Vs. Madhya Gujarat Vij Company Ltd 3, Arcelor Mittal Nippon Steel India Limited Vs. Essar Bulk Terminal Limited 4, Capgemini Technology Services India Limited Vs iValue Infosolutions Private Limited and Anr 5, SBI Cards and Payments Services Pvt. Ltd Vs. KONY Inc. & Ors 6 and Maharshtra State Electricity Distribution Company Limited Vs. Ratnagiri Gas and Power Private Limited & Ors 7.
CONTENTIONS OF THE RESPONDENT:
1 (2004) 2 SCC 321 2 2014 SCC OnLine Guj 15776 3 S.L.P.(C). NO. 6179 OF 2015 dated 09.03.2015 4 (2022) 1 SCC 712 5 Commercial Arbitration Petition (L) No. 35420 of 2023 dated 23.12.2023 6 O.M.P. (I)(COMM.). 127 of 2024 dated 26.04.2024 7 (2024) 1 SCC 333 8
14. Preliminary Counter Affidavit on behalf of the respondent is filed on 18.09.2024. However, on the applicant objecting to piecemeal filing by not filing a comprehensive counter and seeking time to file a reply to the aforesaid preliminary counter, learned Counsel for the respondent submitted that he would not be relying on the averments made in the preliminary counter and would argue the matter only on the maintainability of the present petition and expressing urgency, urged the Court to proceed with the hearing of the matter. Thus, this Court took up the case for hearing in absence of the counter affidavit on behalf of the respondent, whereby there is no specific denial to the averments made in the petition filed by the applicant.
15. On behalf of the respondent it is contended that as per the terms of MSA the implementation services are agreed to commence from 20.03.2021 to be continued for a period of 4.5 months i.e., until 01.08.2021 and from the expiry of the said date, Managed Service term would commence being referred to as 'Aha 2.0 go-live date'.
16. According to respondent, since the applicant is seeking to claim that 'Aha 2.0 go-live date' as mentioned in SOW 2 as 16.11.2021 is to be read into the MSA, the said claim is contrary to the covenants of MSA which clearly stipulates that 9 in the event of conflict between the terms of any documents including the SOW, the terms of the Agreement shall take precedence. Thus, it is contended that the date 01.08.2024 as mentioned in the MSA should be reckoned as date of commencement of 3-year term for the provision of Managed services.
17. According to respondent, as the original term of 3 years of MSA had come to an end on 01.08.2024, the SOW 2 which is entered under the MSA cannot have an independent and separate term beyond the term of MSA. Thus, the respondent by issuing notice dated 09.08.2024 informed the applicant of termination of SOW-2 by giving one month notice, which is a reasonable time.
18. It is the further case of the respondent, that from the communications sent by the applicant itself, it would be evident that they were fully aware of the fact that the original term of 3 years of MSA had expired by 01.08.2024 as drafts of new MSA and SOW were sent to them by e-mail on 06.08.2024, while the applicant was trying to negotiate on the terms for the New MSA. Thus, it is contended that the claim of applicant to the contrary of MSA being valid till 15.11.2024 is only invented for the 10 purpose of the present petition and does not merit consideration.
19. On behalf of the respondent, it is also contended that as the MSA and SOW are both determinable contracts, by operation of law in particular Section 14(1)(d) of the Specific Relief Act, 1963, the respondent cannot be injuncted from terminating the MSA or be directed to perform the MSA. CONSIDERATION BY THE COURT:
20. I have taken note of the respective contentions urged.
21. This Court on hearing the matter for admission on 05.09.2024, had ordered notice to the respondent, while granting exparte ad interim injunction till the next date of hearing, restraining the respondent from giving effect to its statement made in its reply/communication dated 29.08.2024 with regard to 'not being bound to provide any kind of interim support for the period beginning from 09.09.2024 to 16.11.2024'.
22. From the contentions urged, the following questions arise for consideration of the present petition.
a. Whether as per the terms of MSA the 'Aha 2.0 go-live' date is to be reckoned as 16.11.2021 as contained in SOW-2 or 01.08.2021?
b. Whether on expiry of the original term of MSA, the SOW-2 would also become non executable requiring it to be terminated?
11c. Whether the MSA is a determinable in nature?
23. In order to determine the issue raised in the present petition and the respective contentions urged on behalf of the parties, it is necessary to refer to relevant clauses of MSA dated 20.03.2021, and SOW-1 dated 22.03.2021, SOW-2 dated 27.08.2021, Addendum dated 25.05.2022 and Amended and Restated SOW 2 dated 01.11.2023, which are as under:
I. MASTER SERVICES AGREEMENT:
2. Provision and Use of Service Partner Products. 2.3 Each SOW will incorporate the terms of this Agreement by reference. As such, any reference to 'SOW' herein will be deemed to include the provisions of this Agreement. Each SOW will also describe the Service Partner Products or specific Software or Service components thereof to be provided in the said SOW.
3. Services 3.1 The Service Partner shall provide the following Services, during the Term of this Agreement:
3.1.1 Implementation Services: The term for implementation Services shall be deemed to have commenced from 20th March, 2021 and shall continue for a period of 4.5 months, i.e., until 1st August, 2021. Implementation Services include the development of Client Technology (as defined below), the integration of the same into the Software, and the implementation of the resultant Software for the benefit of the Client such that the Client, as on 1st August, 2021, shall have transitioned from its current content-
hosting software to the Software herein, for hosting its audio- visual content for the benefit of its subscribers on a live- production basis. 1st August 2021 is herein also referred to as 'Aha 2.0 go-live date".
3.1.2. Managed Services: The term for the Managed Services shall be commence from the Aha 2.0 go-live date, and shall continue for the period of 3 (three) years from such date ("MS SOW Initial Term"). Notwithstanding the foregoing, the term for 12 managed services may be extended by a period of 2 (two) years at the discretion of the Client, and in such event the Parties shall mutually agree upon the revised scope of Service Partner Products.
4. Term, Termination, and Consequences of Termination 4.1.Term: The term of this Agreement shall commence from the Execution Date of this Agreement, and shall continue for the period of 3 years and 4.5 months from such date ("Initial Term"). Notwithstanding the foregoing, the term of this Agreement may be extended prior to the expiry of the Initial Term by a period of 2 (two) years, by way of the Client providing a 90 days' notice to the Service Partner on their intention to extend such term by the period of 2 (two) years, and in such event the Parties shall mutually agree upon the revised scope of Service Partner Products to be provided by the Service Partner to the Client and the consideration thereof for the remaining period of 2 (two) years. 4.2. Trmination: Either Party may termiante an SOW or the Agreement upon giving the other Party, a f30 (thirty) days prior written notice identifying and detailing the breach triggering such termiantion. In the event of a termination owing to a breach of an SOW and/or this Agreement by eitehr Party, provided that such breach is not remedied within 30 (thirty) days of such notice, or b) ifeither party (i) becomes or declared insolvent or assigns the rights for the benefit of creditors; (ii) suffers, or permits the appointment of a conservator or receiver for its business or assets or any similar action by a governmental entity for the purpose of assuming operation or control of the Party due to the financial condition of the Party; (iii) becomes subject to any voluntary or involuntary proceeding under any bankruptcy or insolvency law, whether domestic or foreign, and such proceeding or action has not been dismissed within a 60 day period; or (iv) has wound up or liquidated its business, voluntarily or otherwise, or d) without cause, with 90 days of prior written notice of such termination to the other Party.
4.3 Consequences of Termination/Expiration: Upon termination of this Agreement, and/or the expiration of the initial Term of this Agreement:
...
e). The Service Partner shall, upon request of the Client, extend its support and Transitional Services (os defined below) as required by the Client on such terms and fees mutually agreed between the 13 Service Partner and the Client in order to allow the Client to transition to another service provider, or be in a position to independently execute the Client Technology and Binaries on any platform in the future, without causing any impediment to the continuous functioning and usage of Aha 2.0 by the Client, and without the need to subscribe to the Services or Software of the Service Partner. It is hereby clarified that the Binaries shall be deployable and usable so long as the documentation and technical architecture provided by the Service Partner is adhered to by the Client
12.Transitional Services:
In the event of Client electing to change the Service Partner during the tenure of this Agreement or SOW, the Service Partner shall provide commercially reasonable transitional services for a transition period not exceeding 180 (one hundred and eighty) days at an additional, capped cost to the Client in a SOW. The Client shall, prior to termination or expiry, request Transitional Services with a 90 (ninety) day notice to the Service Partner. During the 180 (one hundred and eighty) day transition period (or such other transition period as mutually agreed between the Parties), the Service Partner shall provide Transitional Services that include Service Partner's obligation, to comply with terms of Clause 4.3 in its entirety (as mentioned hereinabove), to enable continuous functioning and usage of Aha 2.0 by the Client to the extent (i) that the Service Partner is providing the managed services and (ii) in a manner that enables the Client to continue using the Software without interruption after the termination or expiry of the MS SOW Initial Term Transitional Services shall include knowledge transfer, data transfer, services and migration services which allows the Binaries and Client Technology to be usable in a manner that allows the Client to continue providing their services to their subscribers in an uninterrupted fashion Client, so long as the Client adheres to (i) documentation and technical architecture, and (ii) the non- fungible components, provided by the Service Partner.
28. Severability:
The invalidity or unenforceability of any provision of this Agreement or that of any SOW shall not in any way effect, impair or render unenforceable this Agreement or any other provision contained herein, which shall remain in full force and effect. If any provision of this Agreement is so broad as to be unenfroceable, such provision shall be interpreted to be only to the extent as is enfroceable.14
30. Entire Agreement:
This Agreement, including all SOWs and other documents or communications incorporated herein, represents the entire agreement between the parties and supersedes all prior negotiations, understandings, and agreements, written or oral, relating to the subject matter herein. This Agreement, including all applicable SOWs and other documents and communications incorporated herein, shall supersede and control over any conflicting terms, representations, promises, or conditions included in any purchase orders, invoices or other documents issued by either Party.
30. Precedence In the event of a conflict between the terms of any documents (including but not limited to SOW) signed between the Parties and this Agreement, the terms of this Agreement shall take precedence.
37. Survival:
The following clauses 4.3 (Consequences of Termination), 6 (Intellectual Property Rights), 7.6 (Service Partner Obligations), 8 (Right to Use), 9 (Client Technology Ownership), 10 (Indemnification), 12 (General Warranties, limitation of Liability), 14 (Confidential Information), 18 (Transitional Services), 21 (Dispute Resolution/Arbitration/Choice of Law), 22 (Force Majeure), and this clause 37 (Survival), and such additional clauses that are required to survive, owing to their very nature, shall also survive the Term of this Agreement.
II. STATEMENT OF WORK (SOW):
2. Term The term of this SOW will commence on March 22,2021 (the "SOW Effective Date") and will continue until July 31,2021 and/or till obligations of both the Parties are completed.
10. Terms and Conditions:
Each of the parties agree that they have read this SOW, understand it and agree to be bound by such SOW which incorporates by reference the terms and conditions of the Agreement.
This SOW supersedes all proposals or other prior agreements, oral 15 or written and all other communications between Parties relating to this subject other than those described as above or incorporated by references and shall be regulated by terms and conditions of the Agreement.
III. STATEMENT OF WORK 2 ("SOW-2"):
This Statement of Work 2 ("SOW 2") dated August 27th 2021 ("SOW Effective Date') is by and between Arha Media and Broadcasting Private Limited and its affiliates, a Company organized under the laws of Hyderabad, India whose principal place of business is located at Swarnim Icon, Plot No. 95 & 96, Road |No. 3, Banjara Hills, Hyderabad, 500034, Telangana, India (the "Client") and Firstlight Media Ltd. and its affiliates, a corporation organized under the laws of Ontario whose principal place of business is ^located at 503 Briar Hill, Toronto, ON, Canada MSN 1M8 ("Service Partner"), together the "Parties', and shall be incorporated by reference into and governed by the terms and conditions of the Master Services Agreement between Service Partner and the Client dated March 20,2021 (the "Agreement"). Words and expressions used herein and not defined in this SOW 2 but defined in the Agreement, shall ghave the same meaning as respectively assigned to them in the Agreement and shall apply mutatis mutandis to this SOW 2.
1. PURPOSE OF THIS DOCUMENT:
This SOW 2 describes the scope of Software Licenses and Managed Services that will be executed by Service Partner. Any services not documented in the SOW 2 will be considered out of scope and will require a change request as per Appendix B.
2. TERM Term shall be deemed to have commenced from 15th October 2021 ('Aha 2.0 go live date") and shall continue for the period of 3 years [Initial Term].
However, Client and the Service Partner may mutually agree and change the Aha 2.0 go live date to a later date, in which case the start date of the Initial Term will be the new Aha 2.0 go live date. The new Aha 2.0 go live date shall be no later than 15th October 2021.
The term of this Agreement may be extended prior to the expiry of the Initial Term by a period of 2 (two) years [Second Term], by way of the Client providing a 90 days' written notice to the Service Partner on their intention to extend such term by the period of 2 16 (two) years, and in such event the Parties shall mutually agree upon the revised scope to be provided by the Service Partner to the Client and the consideration thereof for the remaining period of 2 (two) years .
During years 1,2 and 3:
• The Service Partner will offer all the 3 types of services (License, Infrastructure and Support) as detailed in Section 3: Scope.
• At the end of year 3, the Service Partner shall provide the "Binaries" as outlined in Appendix 8 for right to use in perpetuity, without additional license fees and as per terms of, section-11 Span of Control of this SOW-2 read with terms of the Agreement including more particularly a clause no.4.3 (in entirety).
During years 4 and 5: If the Client requires support upgrading to a version of the Service Partner's Platform that is newer than the one baselined at the end of year 3, then the Client and Service Partner shall have the option to enter into an Annual Maintenance Contract (Section 13 of the agreement) as per the terms of the agreement.
• Infrastructure Services o The Service Partner will continue to provide Infrastructure Services as detailed in Section 3:
Scope.
• Development and Support Services o The Service Partner will continue to provide the 4 types of Support Services as detailed in Section 3: Scope.
o The Client will have an option to revise the scope of support services in mutual agreement with the Service Partner.
13. TRANSITION Transition will be governed by the sections 4.3. of the MSA This section outlines 2 key aspects associated with transition of licenses and services from Service Partner to the Client.
IV. ADDENDUM:
This Addendum dated May 25th 2022 ("Addendum") is between Arha Media and Broadcasting Private Limited and its affiliates, a Company incorporated under the laws of India whose principal place of business is located at Swarnim Icon, Plot No. 95 & 96, 17 Road No. 3, Banjara Hills, Hyderabad, 500034, Telangana, India (the "Client") and Firstlight Media Ltd. and its affiliates, a corporation organized under the laws of Ontario whose principal place of business is located at 503 Briar Hill, Toronto, ON, Canada MSN 1M8 (the "Service Partner"), together the "Parties", and shall be incorporated by reference into and governed by the terms and conditions of the Master Services Agreement between Service Partner and the Client dated March 20th, 2021, Statement of Work 1 dated 22nd March 2021 and Statement of Work 2 dated 27th August 2021 (hereinafter collectively referred to as the "Agreement"). Words and expressions used herein and not defined in this Addendum but defined in the Agreement, shall have the same meaning as respectively assigned to them in the Agreement and shall apply mutatis mutandis to this Addendum.
PURPOSE OF THIS DOCUMENT:
This Addendum refers to certain Services to be performed by the Service Partner and these Services shall always be read along with the Services mentioned in Statement of Work 2 dated 27th August 2021. The contents specified in this Addendum are to be treated as excluded from Statement of Work 2 dated 27th August 2021 and incorporated freshly under this Addendum herein. In case of any conflict or contradiction between the contents of this Addendum and the contents of the Statement of Work 2, the contents of this Addendum shall prevail.' Following Statement in Section 12: Fees Support Servaices Fee: The fees for the provision of Managed Services will be USD 43,003 per month"
Is replace with The fees for provision of support and development services will be USD 42,339 per month Effective Start Date: 1st May 2022 End Date: Until the end of SOW #2 contract term V. AMENDED AND RESTATED STATEMENT OF WORK 2 ("Amended and Restated SOW 2"):
This Amended and Restated Stateemnt of Work 2 ("Amended and Restated SOW 2") is made and entered into on 1st day of November, 2023 (Amended and Restated SOW 2 Effecetive Date") 18 and shall amend and restate the original Statement of Work 2 dated August 27 2021 ("SOW 2") executed by and between Arha Media and Broadcasting Private Limited and its affiliates, a Company organized under the laws of Hyderabad, India whose principal place of business is located at Swarnim Icon, Plot No. 95 & 96, Road No. 3, Banjara Hills, Hyderabad, 500034, Telangana, India (the "Client") and Firstlight Media Itd. dba Quickplay and its affiliates, a corporation organized under the laws of Ontario whose principal place of business is located at 257, Adelaide Street, West Suite 600, Toronto, Ontario, Canada, M5H1X9 ("Service Partner"), together the "Parties", and shall be incorporated by reference into and governed by the terms and conditions of the Master Services Agreement between Service Partner and the Client dated March 20, 2021 (the "Agreement"). Words end expressions used herein and not defined in this Amended and Restated SOW 2 but defined in the Agreement, shall have the same meaning as respectively assigned to them in the Agreement and shall apply mutatis mutandis to this Amended and restated SOW 2.
11 PURPOSE OF THIS DOCUMENT This Amended and Restated SOW 2 describes the scope of Software Licenses and Managed Services that is agreed between the Parties with respect to the carrying out / rendering of such entire scope of services and related activities through the Service Partner's principal place of business at Canada and shall also include the (i) Change Request 001 dated May 19th 2022 (ii) Change Request 005 to dated Feb 16th 2023 (iii) Change Request 007 dated February 20th 2023 (iv) Change Request 008 dated February 22nd 2023; (v) Change Request 009 dated June 12th 2023 and (vi) Change Request 011 dated September 16th 2023.
All the documents mentioned herein above shall be collectively referred to as Amended and Restated SOW 2. Any services not documented in this Amended and Restated SOW 2 will be considered out of scope and will require a change request as per Appendix B.
2. TERM Term shall be deemed to have commenced from 16th November 2021 ("Aha 2.0 go live date") and shall continue for the period of 3 years [Initial Term], The term of this Agreement may be extended prior to the expiry of the Initial Term by a period of 2 (two) years [Second Term], by way of the Client providing a 90 days' written notice to the Service Partner on their intention to extend such term by the period of 2 (two) years, and in such event the Parties shall mutually agree 19 upon the revised scope to be provided by the Service Partner to the Client and the consideration thereof for the remaining period of 2 (two) years.
12. FEES This section describes the fees associated with various services of this Amended and Restated Statement of Work 2. The below pricing is based on the assumptions outlined in Non-Functional Requirements in Section 11. All fees in this SOW will commence on "Aha 2.0 Go Live date" introduced by the Client or Client's third-party integrators.
13. TRANSITION Transition will be governed by the sections 4.3. of the MSA. This section outlines 2 key aspects associated with transition of licenses and services from Service Partner to the Client. a. ....
b. Transition Fee The Service Partner shall provide Transitional Services to enable continuous functioning and usage of Aha 2.0 by the Client in a manner that enables the Client to continue using the Software. The below table summarizes the services that will be offered by the Service Partner to enable a successful transition.
18. TERMS AND CONDITIONS This Amended and Restated SOW 2 incorporates terms of the Agreement with respect to the subject matter and supersedes all proposals or other prior agreements, oral or written and ail other communications between Parties relating to this subject other than those described as above or incorporated by references.
24. A conjoint reading of the covenants of the MSA and the various SOWs entered into between the parties as extracted above would indicate that the parties had agreed that their relationship is to be broadly governed by the terms of MSA. However, as and when a SOW was entered into in relation to the services specified in the MSA, the parties by reference have 20 incorporated the terms of MSA into SOWs, as would be evident from Clause 2 of the MSA. Similarly, even in the SOWs when entered into, the terms and conditions of the Agreement are stated to have been incorporated by reference. The incorporation of terms and conditions of the Agreement into SOW whenever entered into would indicate that the said SOW to be independent contract having its own term for its execution.
25. Further, the SOWs entered into would also indicate that the parties being clear that the scope of work to be performed is not dependent upon the term of the MSA, as separate fee was agreed to be charged and paid for the services to be provided under SOWs.
26. Though on behalf of the respondent, by referring to clause 3 of the MSA, it was sought to be contended that the respondent having agreed to provide the Services during the Term of the MSA, and the term of MSA being for a period of 3 years i.e., until 01st August, 2024, all the services agreed to be provided thereunder would have to be treated as terminated by efflux of time, since as per clause 3.1.2 of the MSA, it has been agreed between the parties that the term for the Managed Services shall commence from the 'Aha 2.0 go live date' and shall continue for the period of 3 (three) years from such date.
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27. Further, the respondent by the Amended and Restated Statement of Work 2 (Amended SOW-2) dated 01.11.2023 had specifically agreed that the term in relation to the work to be performed under the SOW-2 shall be deemed to have commenced from 16.11.2021 which is also shown as 'Aha 2.0 go live date', since, the MSA had only mentioned the 3 (three) year period to commence from 'such date'. If the respondent as late as in November, 2023 had agreed that the term of 3 (three) years as specified in clause 3.1.2 of MSA to commence from 16.11.2021 being suit date i.e., 'Aha 2.0 go-live date', it is not open for the respondent now to claim that the term of SOWs would be co-terminus with the term of the MSA and the respondent was considerate towards the applicant by issuing 30 (thirty) days notice terminating the Amended SOW-2.
28. Further, a reading of the clause 12 and 13 of the Amended and Restated Statement of Work 2 (Amended SOW-2) dated 01.11.2023, would also show the respondent having agreed that the fee for the services to be provided would commence on 'Aha 2.0 Go live date' introduced by the applicant, which has been specifically stated in clause 2 of the Amended SOW-2 to have commenced from 16.11.2021 and to continue for the period of 3 years (initial term).
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29. Though on behalf of the respondent it was sought to be contended that the applicant was also aware of the fact of MSA term getting expired by efflux of time, and as the parties were trying to negotiate commercial terms for the extended period of initial term by a period of 2 (two) years, in absence of counter being filed by the respondent by bringing the above facts on record and the preliminary counter filed by it having been withdrawn, the averments made by the applicant in the present petition remain uncontroverted.
30. The respondent having foregone it's right to file counter denying the petition averments and putting forth it's defense, cannot seek to claim that the term of the SOW is not independent of the term of MSA. On the other hand a perusal of clause 4 of the MSA in particular 4.3 thereof, would indicate the respondent being service partner is required to provide transitional services as defined in clause 12 in the event of termination of the Agreement.
31. Further, the respondent having contended that since, by the Notice dated 09.08.2024 the respondent had only terminated the 'Amended SOW2' as it is not required to terminate the MSA which had already expired on 04.08.2024, and since, the terms and conditions of MSA have been 23 incorporated into Amended SOW-2 dated 01.11.2023 by reference, this Court is of the view that the respondent could not have terminated the Amended SOW-2 by giving 30 days notice, as clause 4.2 of MSA, provides for termination with 30 day notice owing to a breach of SOW and the party at breach not remedying the said breach within 30 days of such notice. The notice dated 09.08.2024 as issued by the respondent does not indicate any breach by the applicant requiring it to remedy the same within 30 days, failure of which gives a right to the respondent to terminate the SOW. In absence of the Notice dated 09.08.2024 specifying any breach, the Termination of SOW would have to construed as 'without cause' requiring to give 90 days of prior written notice to the other party (the applicant herein) as specified in Clause 4.2 (d) of the MSA.
32. Since, the respondent had resorted to termination of Amended SOW-2 by the Notice dated 09.08.2024 'without cause', having regard to the clause 37 of the MSA, providing for the survival of clause 4.3, whereby the respondent is required to provide Transitional services as per clause 18 of the MSA for a period of 180 days, and the applicant having made a request for Transitional Services vide letter dated 16.08.2024, it is not open for the respondent to either claim or contend that it would be 24 liable for providing services beyond 09.09.2024 and would be able to provide transitional services only from 16.11.2024.
33. Though on behalf of the respondent reliance is placed on the decisions in Chetan Iron LLP., Vs. NRC Ltd. 8 and Ghh Bumi Mining Services Pvt. Ltd. Vs. Hindustan Zinc Ltd 9, to contend that both the MSA and SOW being determinable in nature as they would fall under Section 14(1)(d) of the Specific Relief Act, 1963, (for short 'Act, 1963) and as such the present petition is liable to be dismissed, the said submission is being made ignoring the provisions of Section 10 of the Act,1963, which provides for specific performance of contract to be enforced by the Court subject to exceptions.
34. Though the respondent had contended that both the MSA and SOW's are determinable in nature, it is to be noted that as per clause 4.3 read with clause 18 and clause 37 of MSA, which clauses by reference are incorporated into SOW, the respondent is required to provide transitional services for a period not exceeding 180 days and as such it cannot be held that there are no obligations to be performed on termination, accepting the submission of the respondent. Thus, the applicant is entitled to the benefit of exception carved out under Section 10 of the Act, 8 2022 SCC OnLine Bom 159 : (2022) 2 AIR Bom R 225 9 2023 SCC OnLine Del 3753 25 1963.
35. Since, the services being provided by the respondent under amended SOW-2 being in relation to broadcasting services through its OTT platform, any disruption by stoppage of services by the respondent would not only result in applicant losing its subscriber base, but would also impact the existence of the applicant itself having lost credibility, more so taking note of the fact that the applicant's service offering is being undertaken through Internet Protocol connected devices, which is a fast changing field, the balance of convenience is to tilt in favour of the applicant.
36. In the light of the above discussion, this Court is of the view that the applicant is entitled for grant of relief as sought for in the present petition. It is also to be noted that the respondent would not be put to any loss, as the applicant would be liable to pay the fee for the services provided by the respondent in terms of the 'fee' specified in the Amended SOW-2 till 15.11.2024 and thereafter for the Transitional services in terms of the MSA.
37. Accordingly, the petition is allowed and the applicant is entitled for the relief as set out in the petition subject to the applicant initiating proceedings under the Arbitration and Conciliation Act, 1996 within the time prescribed thereunder. 26
38. Pending miscellaneous petitions if any shall stand closed. No Costs.
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T. VINOD KUMAR, J
Date: 14.10.2024
VSV/MRKR