Quashed

Media Masters and Anr. v. Reasonable Advertising Pvt. Ltd.

Bombay HC10 Sept 2012ARBP/461/2009

Case brief

AI extract

What is this about?

The High Court set aside an arbitral award in a dispute over TV serial production and marketing fees. Finding the award perverse for ignoring contractual nuances regarding TVR calculations and FCT buy-back, the Court quashed the award while the cost component was kept aside, remanding the matter for reconsideration.

What did the court decide?

The impugned award dated 13th March, 2009 is set aside and quashed except for the cost component. The matter is remanded to the Arbitral Tribunal for reconsideration with an opportunity given to both

Media Masters and Anr. Vs Reasonable Advertising Pvt. Ltd. — Arbitration | Bombay HC (2012)

arbp461-09

rpa

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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ARBITRATION PETITION NO. 461 OF 2009

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(1) M/s. Media Masters, A Partnership Firm having its registered office at No.825, Das Commercial Complex, Kanakpura Road, 7^th Block, Jayanagar, Bangalore – 8.

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(2) Mr. Ravindra H. P., Partner of M/s. Media Masters having his Place of business at 825, Das Commercial Complex, Kanakpura Road, 7^th Block, Jayanagar, Bangalore – 8. .. Petitioners V/s.

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M/s. Reasonable Advertising Pvt. Ltd. A company incorporated under the Provisions of the Companies Act, 1956 and having its Registered Office at G-4, Richa Industrial Estate, B-29, Off New Link Road, Nr. Monginis Road,

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Andheri (West), Mumbai – 400 053. .. Respondents

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Ms. Mandakini D. S. Singh for the Petitioners. Mr. M. Baravi i/b. Mr. B. G. Saraf for the Respondent.

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CORAM : ANOOP V. MOHTA, J. RESERVED ON : 13^th AUGUST, 2012. PRONOUNCED ON : 10^th SEPTEMBER, 2012.

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JUDGMENT :

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The Petitioner has challenged impugned order dated 13^th March, 2009, passed by the Sole Arbitrator.

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The operative part of the Award is as under :

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“AWARD

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A) The Claim of the Claimants is allowed and it is hereby ordered that the Respondents shall pay Rs.29,51,000/- to the Claimants pursuant to this award alongwith interest of Rs.12% p.a. from 15^th August, 2006 to till the date of realization.

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B) The counter claim of the Respondents is rejected and dismissed with no order as to cost. The Respondents to bear their own costs for defending the claim and also cost in the counter claim.”

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The basic events as per the Petitioners are as under:

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On 4^th April, 2006, the letter granting approval by Surya TV to”Onam Bumper” for initial telecast of 65 episodes on Monday to Friday during prime time slot at 10.00 to 10.30 p.m. stating that each episode should be of 25 minutes and allotting 240 seconds of Free Commercial Time (FCT) which could be marked.

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On 19^th May, 2006, execution of the Contract between Petitioner No.1 and Respondent for production of the serial by the Petitioners and its allotted FCT's marketing on the terms and conditions stated therein.

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On 11^th July, 2006, notice addressed to Petitioners copy endorsed to Respondent stating that they were

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discontinuing the policy of banking FCT's w.e.f. 1^st August, 2006.

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On 24^th July, 2006, the Petitioners at the insistence

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and instance of the Respondent informed Surya TV that henceforth, Respondent has been authorized as their sole marketing agency for exclusive sale of FCT of the programme, “Onam Bumper” and confirming that the invoices should be raised in the Respondent's name as they would be paying the telecast fees and service tax directly to them. Clause 16 of the Agreement stood varied/modified.

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On 28^th July, 2006, the termination notice addressed

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by Respondent to Petitioners on the basis that required TVR was not being delivered by the Petitioners. On 4^th August, 2006, Surya TV stops telecast of serial as Respondent fail and neglect to pay the telecast fees to them. On 10^th August, 2006, the Petitioners reply to notice, inter alia informing them that notice was premature. On 19^th August, 2006, the Respondent's Advocate's rejoinder denying the premature nature of the notice and calling upon the Petitioners to buy back the FCT. On 14^th

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September, 2006, the Respondent invokes arbitration, nominating Mr. Pravin Aggarwal. On 18^th September, 2006, the Petitioners sur-rejoinder stating that TVR cannot be applied to production fees for the1st 33 episode as per clause 10 of the agreement. On 28^th October, 2006, the Petitioners reminder to their letter dated 18^th September, 2006 and suggesting the name of Mr. Ganesh as he had both media and marketing / advertising background. In October 2006, the Respondent files Arbitration Application No.206 of 2006 before the Bombay High Court. On 25^th April, 2007, the Petitioners advocate writes to the Respondent's Advocate suggesting four names of suitable persons from the media and marketing/advertising background. On 21^st June, 2007, the order in Arbitration Application passed appointing the Hon'ble Justice Mr. D. G. Deshpande (Retd.) as the Sole Arbitrator and inter alia recording the Petitioners only objection being inability to pay for the high cost of arbitration in Mumbai. On 7^th August, 2007, letter fixing preliminary meeting on 22^nd August, 2007, by the Hon'ble Justice Mr. D. G. Deshpande (Retd.) to both parties, when the Petitioners realized that order dated 21^st June, 2007 had been passed in Arbitration

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Application No.206 of 2006, copy of which was made available to them only on 14^th August, 2007. On 16^th August, 2007, the Petitioners informed that they applied for rectification of said order dated 21^st June, 2007. The Petitioners file application for rectification of the order dated 21^st June, 2007.

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On 22^nd August, 2007, the learned Arbitrator ruled on the Petitioners objection to his appointment, ex-parte rejecting the Petitioners claims and fixes the dates-programme for arbitration.

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On 27^th September, 2007, the Respondent file statement and of Claim claiming an amount of Rs.25,76,067.94 together with interest @ 18% p.a. On 14^th December, 2007, the Petitioners file Written Statement and Counter Claim for Rs.38,68,000/- together with interest @ 18% p.a. The Petitioners also filed their Affidavit in lieu of Evidence in Chief. In June 2008, the Petitioners filed their affidavit in lieu of Evidence in Chief. On 8^th August, 2008, the Petitioners file Application for reducing prohibitive costs of Rs.35,000/- levied

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for non-appearance at the arbitration proceedings despite due notice of their absence. The Hon'ble Arbitrator rejects their application.

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On 17^th March, 2009,the impugned Award passed

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rejecting Petitioners Counter Claim as baseless and bogus and allowing the entire claim of the Respondents. Hence, the Petitioners have filed this Arbitration Petition. On 20^th October, 2011, the delay was condoned and admitted on 17^th November, 2011, by Justice S. J. Kathawalla.

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As per the Respondents, the facts are as under:

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The Petitioners had shot certain episodes of a television serial, “Onam Bumper” (“the serial”). The Petitioners were granted approval from Surya TV to air and telecast 65 episodes of the serial from 22^nd May, 2006, every Monday to Friday from 10.00 p.m. to 10.30 p.m. on payment of Rs.30,000/- per episode and deposit of interest free refundable security deposit of Rs.1,50,000/- with 240 seconds of Free

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Commercial Time (“FCT”)per episode.

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To market the serial and utilize the FTC given to them, the Petitioners approached Reasonable Advertising Private Limited (“the Respondents”). Negotiations ensued between the parties. Initially, a Memorandum of Understanding was entered into by and between the parties on 9^th May, 2007. Eventually, an Agreement was entered into by and between the parties on 19^th May, 2006 at Mumbai (“the contract”). Under the contract, the Respondents (the Party of the Second Part therein) had to, inter alia, market the serial on behalf of the Petitioners (the Party of the Second Part therein) at and for the consideration and on terms and conditions mentioned therein.

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The following clauses of the contract are material:

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“2. That the parties to the said Agreement are bound by this agreement dated 19^th May 2006, for the whole life of the serial on Surya TV. That it is mutually agreed that the terms and conditions of this agreement

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will be valid till the currency/validity of the telecast of

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“the serial” over Surya TV Channel.

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4. The Party of the First Part have authorized the

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Party of the Second Part to exclusively market the Free Commercial Time (FCT) of 240 seconds and ASB (Additional Spot Boy), if any, available for “the serial” for each episode. For allowing the party of the second part to market and sell the said FCT, the party of the second part shall pay telecast fee, which is presently, Rs.30,000/- (Rupees Thirty Thousand) + 12.24% service tax as per applicable rate card in force per episode directly to Surya TV for the telecast of the serial.

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5. That the party of the second part have already

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paid an amount of Rs.3,00,000/- (Rupees Three Lakhs Only) + 12.24% service tax towards the telecast fee as under:

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a. Rs.1,50,000/- (Rupees One Lakh Fifty

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Thousand Only) + 21.245 service tax

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already paid on 10^th May 2006 through demand draft favouring Survya TV.

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b. Rs.1,50,000/- (Rupees One Lakh Fifty Thousand Only) + 12.24% service tax paid on 9^th May 2006 vide cheque No.875720 dated 9^th May 2006 drawn on Corporation Bank, Versova Branch, Mumbai favouring Media Masters.

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The amount of Rs.3,00,000/- (Rupees Three Lakhs) + 12.24% service tax will be adjusted against the telecast of the last 10 episodes of “the serial”.

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6. The party of the second part has agree to pay to

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the party of the first part total amount of Rs.15,60,000/- (Rupees Fifteen Lakhs Sixty Thousand Only) as advance towards production cost of 30 episodes @ Rs.52,000/- per episode in the following manner on the basis of 10.00 TVR.

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a. an amount of Rs.1,00,000/- (Rupees One

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Lakh Only) as advance already paid vide

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cheque No.875719 dated 9^th May, 2006,

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drawn on Corporation Bank, Versova Branch, Mumbai, favouring Media asters at

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the time of signing of the MOU, which will

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be adjusted against future episodes of “the serial”.

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b. Balance of Rs.14,60,000/- (Rupees Fourteen Lakhs Sixty Thousand Only) on 22^nd May, 2006 after signing of this agreement.

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c. The advance thus paid would be adjusted

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against the last few episodes of the serial.

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8. The party of the first part assures to the party of

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the second part that the production quality of the serial shall be as per specifications and technical standards set out by Surya TV and the TVR of the serial at all times shall be equal to or more than 10 in the category of CS Female 15 + (TAM ratings) in Kerala Region/Market.

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9. That the second party assures to pay to the first

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party to production charges per episode based on the following table.

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TVR (C & S 1'5+ females in Kerala mkt. (TAM rating	Production charges
10_12	Rs.52,000/-per episode
13-15	Rs.65,000/-per episode
16 & above	In the event of a TVR exceeding 16, there will be a review and the cost per episode will be worked out mutually which in any case would be more than Rs.65,000/- and less than Rs.96,000/- per episode.”

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10. In case the TVR being less than 10 the party of the second part will pay to the party of the first part @ Rs.5200 per TVR per episode. Specifically speaking, if the serial delivers 6 TVR, the payment would be for an amount of Rs.31,200 (Rupees Thirty One Thousand Two Hundred Only). This would be calculated on the performance of every 22 episodes after the telecast of

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the first 33 episodes, which would be paid on the basis of Rs.52,000 per episode. However, the party of the first part will make a serious endeavour to deliver double digit ratings on the said TG right from episode 1 till the last episode.

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14. That every party to the above agreement shall have the right to terminate this agreement by giving two weeks notice only in the case of the following:

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a. In case of any default in the payment by the party of the second part to the party of the party of the first part,

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b. In case of the inability of the first party to deliver the TV ratings of 10:00 on the said TG.

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c. In case of the inability of the party of the first part to deliver the tapes in time for telecast of the serial to the channel as per the channel norms.

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15. The party of the second part would send the cue sheet of all advertisements to be carried in the episodes of the serial to the party of the first part. The first party undertakes to conduct the capsuling job & deliver the tapes complete in all respect to the channel.

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16. It is hereby agreed between both the parties that

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in case of premature termination of the agreement by the either party, the part of the first part shall buy back any FCT banked by the party of the second part till the date of expiry or termination of this agreement. In the even to of premature termination due to clause 14 a or inability of the second party to sell FCT's deposit rating of 10 on the said TG, the party of the first part shall pay for the said unutilized banked FCT the proportionate cost of the unsold and banked FCT on the basis of the amount payable and already paid by the party of the second part to the party of the first part towards production cost only pertaining to the

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episode of which the FCT's were banked.

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In case of premature termination of the agreement by either party due to clause 14 b/c, the party of the first part shall pay for the said unutilized banked FCT the proportionate cost of the unsold and banked FCT on the basis of the amount payable and already paid by the party of the second part to the party of the first part towards production cost and the amount already paid towards to the channel towards telecast fee pertaining to the episodes of which the FCT's were banked.”

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(emphasis supplied)

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Accordingly, the Respondents had paid an aggregate sum of Rs.17,28,260/- to the Petitioners under the contract. The Respondents also paid a sum of Rs.1,68,360/- to Surya TV as and by way of security deposit for 5 episodes. Thereafter, on 24^th July, 2006, the Petitioners addressed a letter to Surya TV informing them that they have authorized the Respondent as

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their sole marking agency for exclusive sale of FCT of the programme, “Onam Bumper” and confirming that the invoices should be raised in the Respondents name as they would be paying the telecast fees and service tax directly to them. By this variation in the terms of the agreement dated 19^th May 2006, all liability for FCT attached to the Respondent, including under clause 15 of the said agreement dated 19^th May, 2006. Hence, there could be no question of any buy back of FCT on premature termination of the agreement dated 19^th May, 2006, as envisaged by clause 16 thereof.

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The Respondents observed that the Television Viewer Rating (“TVR”)of the serial was very low and touched 6.16 on the week's average. In the circumstances, the Respondent terminated the contract by issuing the notice dated 28^th July, 2006 as contemplated under Clause 14b thereof. The demand of an aggregate sum of Rs.38,85,478/- (Rs.17,28,360/+ Rs. 21,57,118/- towards, banked FCT till episode 33). As per the Respondent the termination notice was issued during the 45^th episode of the serial. The serial stopped airing at the end of

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50^th episode.

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Firstly, the Hon'ble the Chief Justice of this Court, under Section 11 of the Arbitration Act has appointed by consent, the Arbitrator. The Arbitration proceedings were proceeded accordingly. No challenge can be permitted to raise under Section 34 of the Arbitration. Thus, the objections decided by the Arbitrator before proceeding with the matter. The order so passed under Section 11 is final and binding. The remedy is elsewhere. The consent only of the Advocate, in a given case is normal way of passing the order but later on if parties challenges the same, even raising the issue with regard to the powers given to the Counsel/ Advocate to give the consent, the Arbitration matter unnecessarily be restored/ delayed. It is also necessary to note that when the matter requires specific and technical and/or expertise knowledge of the subject matter and/or issue involved, the appointment, in such type of matter be and by written consent from the parties, to avoid such ground to challenge the same.

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The learned Arbitrator pursuant to the objections so raised under Section 12 read with Sections 13, has passed some orders against the Respondents that itself, as sought to be contended, cannot be reasons that the Arbitrator was bias and/or impartial and/or made up his mind to pass order against the Petitioner i.e. Original Respondents. Mere allegations of bias itself is not sufficient. The Arbitrator being Court appointed has no choice but to proceed with the matter. The Petitioner, therefore, is entitled to challenge this order by challenging the main award under Section 34 read with Section 16 (6) of the Arbitration Act. In the present facts and circumstances, the orders so passed in no way stated to be wrong and/or contrary to the law.

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The important aspect in the present matter and as recorded by the learned Arbitrator that Claimant has succeeded in proving that the clause related to maintaining the T.V.R. were crucial, vital and important; the Respondents could not secure and/or procure the double digit T.V.R. at any time from episode one to episode fifty. The termination of the agreement by

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Claimant was perfectly legal. Consequently, rejected the defence on all counts.

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Admittedly, the agreement between the Producer (Petitioner) and the Marketing Agent (Respondents) dated 19th May, 2006 being the commercial document needs to be considered from the point of view of the nature of transaction/ business. The Petitioners are in business of producing television serials. The Respondent is a company incorporated under the Companies Act, 1956 and carries on the business of production, advertising and marketing of television serials. The Petitioners have shot and canned certain episodes of the television serial "Onam Bumper." On the basis of which one Surya TV granted approval to air and telecast 65 episodes of the serial w.e.f. 22 nd May, 2006 from Monday to Friday at 10.00 p.m. to 10.30 p.m. on payment of Rs.30,000/- as referred above. The payment of Rs.30,000/- per episode and deposit of interest free refundable security deposit of Rs.1,50,000/- with 240 seconds were Free Commercial Time (herein after referred to as “FCT”) per episode on terms and conditions and stated initially in the letter

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dated 4th April, 2006 which was ultimately become agreement dated 19th May, 2006 proceeded by an M.O.U. dated 9th May, 2006.

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It is clear from the clauses of the agreement that :- (i) The agreement was made valid for the whole life of “the serials on Surya T.V;

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(ii) The Petitioners allow the Respondent to market the 240 seconds FCT+ASB, if any for each episode, in lieu of which the Respondent would pay the telecast fee of Rs.30,000/- per episode to Surya TV directly for telecast of the serial;

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(iii) The Respondent had deposited an aggregate of Rs.3,00,000/- +12.24% service tax towards telecast fee with both Surya TV (Rs.1,50,000/- only) and the Petitioner No.1 (Rs.1,50,000/- only) which was to be adjusted against telecast of the last 10 episodes of “the serial”.

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(iv) The Respondent agreed to pay to the Petitioner No.1, a sum of Rs.52,000/- per episode for the first

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33 episodes, after which payment would be made on the basis of the TVR of C&S 15+ in Kerala market region being obtained – i. e. Rs.52,000/- on TVR of 10-12; Rs.65,000/- on TV R of 13-15 and between Rs.65,000/- and Rs.95,000/- on TVR of 16+. If the TVR was less than 10, then, Rs.5,200 would be deducted per TVR point obtained less than 10.0. However, the TVR ratings would be calculated on the performance of every 22 episodes and the first such calculation would be effective after the 55th episode.

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(v) The Respondent paid an aggregate of Rs.15,60,000/- to the Petitioner No.1, i. e. Rs.1,00,000/- as advance to be adjusted against last few episodes of “the serial”, which would be calculated on the basis of the TVR obtained, and Rs.14,60,000/- towards production cost of 30 episodes @ Rs.52,000/- per episode. (vi) The agreement was terminable at the option of either party, by giving two weeks notice, after which period the obligations of either party to the

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agreement would cease, only in the following cases -

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(i) in case of default in payment of any amounts due to the Petitioners by the Respondent; (ii) in case the Petitioners could not deliver the TV rating of 10.0 to be calculated as aforesaid after the 55th episode was telecast; and (iii) in the event the Petitioners could not deliver the complete encapsulated tapes to the TV channel in time for the telecast.

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(vii) In the event, the agreement stood terminated prematurely, then the Petitioners would be obliged to buy back any unutilized and banked FCT at the rates provided from the Respondent.

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Later on, as they agreed on 11th July, 2006, Surya TV, addressed a letter to both the parties herein, categorically stating that they were implementing the change in policy for banked FCT, w.e.f. 1st August 2006 and allowing only a three week period from the date of telecast to consume the banked FCT, failing which 50% of the banked FCT would lapse, leaving a balance of 50% only to be consumed. Moreover, this banked

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FCT would not be allowed to be consumed during the telecast days falling during important festival days, when the sale of FCT could fetch a premium price on account of maximum viewership on such festival days/holidays. Thereafter, on 24th July, 2006, the Petitioners addressed a letter to Surya TC informing them that they have authorized the Respondent as their sole marketing agency for exclusive sale of FCT of the programme, “Onam Bumper” and confirming that the invoices should be raised in the Respondents name as they would be paying the telecast fees and service tax directly to them. By this variation in the terms of the agreement dated 19th May 2006, all liability for FCT attached to the Respondent, including under clause 15 of the said agreement dated 19th May 2006. Hence, as alleged no question of any buy back of FCT on premature termination of the agreement dated 19th May 2006, as envisaged by clause 16 thereof.

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In the mean while, 35 episodes had been telecast by 24th July, 2006. A further 27 episodes of the serials were shot and ready for delivery/telecast. As noted on 28th July 2006, the

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Respondents terminated the agreement. It was on a foundation of poor performance on the part of the Petitioner, therefore, invoked clause 14(b) of the agreement. They also called upon the Petitioner to pay an aggregate sum of Rs.38,85,478/- (i.e. Rs.17,28,360 + Rs.21,57,118 towards banked FCT till episodes 33) plus amounts entailing from consolidated statement of accounts submitted by the Respondent within two weeks from the receipt of the notice. The Petitioner resisted the same. The Respondents rejoined the said reply. Considering the nature of business and the transaction and as per clause 10 of the agreement, the Petitioner were under the obligation to make a serious endeavor to deliver double digit ratings right from first episode itself. The Petitioner sought all possible steps to ensure the same. The Producers or Makers of the said T.V. Serial in no way would take such steps to sabotage the serial. The everyday T.V.R. of any T.V. serials just cannot be based upon the production and/or investment, the stars and/or supporting actors, costly stages, music and/or many other such things. All these things are not sufficient to guarantee that the particular serials will attract the crowd or the T.V.R. In the media, the

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T.V.R. itself in the given case may be gamble and less of an accurate prediction. The question herein is the alleged guarantee that it should achieve and/or attract agreed T.V.R. i.e. less than 10. It is well known that despite everything right, a serial may still not achieve the expected TVR. This is the world of competition. There are number of channels which try to attract the audience by one way or other. Ultimately, it followed by the earning through the advertisement second by second. This is the basic source of their earning income. The more crowd they attracted, the more T.V.R. they get. If sometime by pre-agreement and/or in a given case at the 11th hour, subject to the climax of the serial and/or the climax scene or cinema. Therefore, nothing is certain except the endeavor of the parties to see that the particular cinema and/or episode attract the crowd all the time. The social scenario, change of demand and supply always plays an important role to attract the audience and/or to get the alleged T.V.R.. There is no fixed formula. Thus in no way, sufficient and/or reasons to show that every time any episode, the T.V.R. should not be less then 10. Immediately or in a given case, the new serial may or may not attract the crowd.

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The time goes. The serial proceeds, after some time only, T.V.R. and/or audience get attracted. Both the parties were fully aware of a nature of business. The agreement itself, and as contended by the Petitioner even before the Arbitrator and even at the time of reply to the first notice and even in the written statement, excluding first 33 episodes, the T.V.R. points need to be calculated only after every 22 episodes. There is no material on record to show that the Petitioner intentionally and/or by their act lost T.V.R.. It is not expected that the producer of the T.V. serials would try to hamper their own products.

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The learned Arbitrator, in my view, also failed to overlook this commercial aspect and the nature of business while passing the order. The T.V.R. ratings as the serial viewership builds up gradually. The maintaining the T.V.R. of 10.00 points throughout the course of the serial was not mandatory. Clause 10 of the agreement itself provided for calculation of payment when the T.V.R. might be less or more than 10.0. Considering the nature of T.V.R. and as recorded above, the finding that clause 10 is mandatory in all respects

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and basically the delivery of 10 points during the course of the serials, in my view, is wrong interpretation of the clear clause.

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In the agreement it is specifically mentioned and agreed that if the T.V.R. falls down, parties would liable to pay Rs.10,000/- per T.V.R.. It was agreed to pay Rs.52,000/- per episode assuming that the T.V.R. could not be less than 10. As per the clause 10 of the agreement, if the other parties entitled to give the T.V.R. relating only on the basis of every 22 episodes, after the telecast of first 33 episodes, then there was no question of claiming anything on the basis of T.V.R. for the first 33 episodes. The Respondents admittedly, claiming the amount even referring to those 33 episodes. The calculation were made accordingly. The learned Arbitrator accepted the details/ statement so given by the Respondent in toto and passed the order. The Petitioner's calculation and the statement were not at all considered; as the learned Arbitrator has proceeded on the foundation the maintaining of the T.V.R. Rating was mandatory, but once as recorded above, it is held that it cannot be and/or

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stated to be the mandatory, the claims so raised is unacceptable.

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The Respondents themselves in paragraph 6 of the Arbitration Petition stated that it was agreed that if the said TVR falls down then the applicant only liable to pay Rs.5200/- per TVR. It would to start only after the telecast of first 33 episodes. The applicant accordingly paid to the respondent Rs.3,00,000/initially and thereafter paid Rs.15,60,000/- for the 30 episodes @ Rs.52000/- on the basis of 10.00 TVR. The Respondent themselves averred as referred above that when the T.V.R. falls down, the applicant was only liable to pay Rs.5,000/- per T.V.R. The learned Arbitrator, in my view, committed error while passing the above order and that amounts to overlooking the agreed close and the undertaking of the business, between the parties, including averments so made by the Respondents with this regards.

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While granting the quantum so prayed by the Respondents, the Arbitrator has recorded by accepting the statement so filed by the Respondents which covers the episode numbers up to 33 allotted FCT, use of FCT and banked FCT.

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This award, therefore, considering the agreement between the parties read with calculation so placed on record by the Petitioner and by solely relying upon the calculation so given by Respondents on record, in my view itself, are the sufficient reasons to interfere with the above.

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The learned Counsel appearing for the Respondents, apart from written submission as relied upon by the various judgments of the Supreme Court as well as this Court and submitted that in Sudarsan Trading Co. v. Government of Kerala (1989) 1 SCR 665 that “interpretation of a contract, it is trite, is a matter for arbitrator to determine” . Thus, interpretation of the terms of a contract is within the exclusive domain of the Arbitrator. It is not for this Hon'ble Court to sit in Appeal and reevaluate the interpretation accorded by the Learned Arbitrator to a term. Similarly, relying upon State of Utter Pradesh v Allied Constructions (2003) 7 SCC 396 the Hon'ble Supreme Court, in the case of G. Ramchandra Reddy &

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Co. v. Union of India; AIR 2009 SC 2629 held “Interpretation of a contract may fall within the realm of the Arbitrator. The

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Court while dealing with an award would not re-appreciate the evidence. An award containing reasons also may not be interfered with unless they are found to be perverse or based on a wrong proposition of law, if two views are possible, it is trite, the Court will refrain itself from interfering” . A Division Bench of this Hon'ble Court, relying on Sudarsan Trading Co. v Government of Kerala (supra), has held in Oil and Natural Gas Corporation v Essar Shipping Ltd. 2008 (6) Bom CR 440 and Chowgule Brothers v Rashtriya Chemicals and Fertilizers Ltd. (2006) 4 Bom CR 78 that “it is settled law that the court will not substitute its own interpretation for that of the arbitrators even if the court thought it not be the correct view”. The law so settled need no discussion. But as the same stoke, the settle law is if the award is contrary to the terms and the record, the Court has power to interfere with such award. The Court's interference is not totally barred.

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I have already observed that the part and/or clause of commercial document should not be read in isolation. The whole contract of the agreement needs to be read together to

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understand in case of any doubt and for vague clause/ clauses equally, if clause and/or agreement is build up. There is no question of interpreting the clause by overlooking the whole clause and the whole agreement itself. The parties have agreed for this clause and were fully aware of the nature of business. It is impractical and/or claiming and/or earning from day one as claimed. The clauses 8,9,10, 14b, and 16 as read and referred above nowhere proceeded that the maintaining T.D.R, 10, was mandatory part of the agreement.

¶147

I am not inclined to accept the submission so made by the learned Counsel appearing for the Respondents that the view so taken by the learned Arbitrator by interpreting the clause as plausible and/or possible view and considering the nature of business and facts and circumstances of the case read with clear clauses so referred. Apart from admission and in view of positive case of the Respondents themselves, the award by the learned Arbitrator is contrary to law and the material placed on record by the parties.

¶148

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¶149

The learned Arbitrator further wrong in considering the view of the above finding itself when the first 33 episodes were excluded from T.V.R. based upon the production. The question of buy back of FCT for the said 33 episodes was uncalculable. There was no question of any calculation as per the norms of normal practice as the establishing time and/or grace period given for any serials to establish itself just cannot be overlooked. The agreement/ letter dated 24th July, 2006 issued by the Petitioner at the insistence and instance and insist by the Respondents that the FCT allotted stood assigned and transferred to the name of Respondent and the person to whom the channel issues the bills, becomes the owner of all the FCT of that serial.

¶150

The case of the Petitioner of the actual costs of 30 seconds per episode from episode 34 to 50 as reflected in the Petition and from that point of view was not considered at all. The Arbitrator accepted the calculation submitted by the Respondents by overlooking all these aspects covering episode number, T.V.R., production amount, FCT amount, utilized and

¶151

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¶152

un-utilized, total costs a per episode, costs per ten seconds and costs of FCT buy back. The sudden termination in view of the above back ground and discontinuation of the further episode though ready, in the back ground are relevant factors which the learned Arbitrator has failed to record.

¶153

The learned Arbitrator Tribunal without assigning sufficient reasons in this back ground, just rejected the counter claim raised by the Petitioner. The amount so awarded by overlooking the case of the Petitioner and the counter claim, definitely changes the whole calculation and the details so given by the Respondents and was also the amount so awarded in the present case. The stoppage of such serials in such fashion definitely affect the reputation and their future production business. The un-paid amount of the serials also remained to be considered by the Arbitrator.

¶154

I have already considered the scope and power under Section 34 (4) of the Arbitration and whereby, based upon the facts and circumstances, the Court may remand the

¶155

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matter for particular issue/ point and/or for restricted point. But in a case or in a situation where all issues are interconnected and/or inter-related including the claim and the counter claim and if it is not possible for the Court to adjudicate by restricting the relief and/or a prayer sought may remand for the retrial of the matter, based on the existing material. In given case, permitting the parties to lead additional evidence and/or to place on record additional documents. The Arbitrator if available, the matter can be placed before the same Arbitrator. If not available, the parties may take steps to appoint the Arbitrator by choosing their own Arbitrator and in a case like this, when specialized and/or expertise Arbitrator is required; the Arbitration proceed expeditiously.

¶157

As I am inclined to set aside the award, so far as the costs is concerned, in this back ground, I am inclined to observe that both the parties to bear their costs, though costs was fully awarded against the Petitioner.

¶158

Resultantly, (a) The award dated March, 2009 is

¶159

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quashed and set aside except the cost. (b) The matter is remanded. (c) The Arbitratal Tribunal to reconsider all the issues by giving an opportunity to both the parties. The parties to take steps to continue with the same Arbitrator and/or appoint a fresh Arbitrator along with the existing Arbitrator. (d) All points are kept open. (e) The Arbitration Petition is disposed off accordingly. (f) No order as to costs.

¶161

(ANOOP V. MOHTA,J.)

Media Masters and Anr. v. Reasonable Advertising Pvt. Ltd.

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Media Masters and Anr. v. Reasonable Advertising Pvt. Ltd.

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