TDSAT rules in favour of ESPN in dues dispute with ICC

MUMBAI: ESPN Software India has won its case against Pune's biggest MSO Intermedia Cable Communication (ICC) for recovery of dues that go back to December 2004.

In what is being described as a landmark judgment, the Telecom Disputes Settlement Appellate Tribunal (TDSAT), which was hearing the case on a complaint filed by the sports broadcaster late last month, has directed ICC to clear of its pending dues even in the absence of any written contract.

The dues under dispute cover the the period 5 December 2004 to 8 June 2005 when the operator was provided signals even though the agreement between the two companies had expired as of 5 December 2003.

TDSAT has ruled that since the signals were continued beyond the date of termination of the agreement, the subscription fee for the period be kept at the old rate of Rs 32 per subscriber. This amounted to a monthly subscription of Rs 1,272,000 per month that was owed to ESPN for the period under dispute.

The Tribunal has directed ICC to pay ESPN Rs 7,221,000 in three equal monthly installments payable on 1 June, 1 July and 1 August respectively. In its order, TDSAT indicated that since the MSO had argued that it was facing a a problem of recovery of money from the ground, a point not denied by ESPN, it was giving the operator three months to clear the dues.

Any further delays would make ICC liable to pay additional interest at 12 per cent per annum, the Tribunal has ruled.

Commenting on the development, ESPN's CFO Vijay Rajput said, "This is a landmark judgment. This judgment will act as a precedent wherever the cable operators arm twist broadcasters under the pretext of negotiations."

During the course of the hearing, an interesting point that came up was that the relations between the two parties turned sour following the alleged disconnection of signals by ESPN for four days in January 2004 at the time of the India?Australia cricket series followed by another disconnection in June 2004 for two days at the time of the Euro Soccer Football matches. ICC had claimed that the two signal disruptions were done despite excess subscription amounts having been made to ESPN.

The MSO argued that it paid subscription w.e.f 5 December 2003 at the old rate despite not being able to collect the amounts from the ground. The crux of its argument was however that since no fresh agreement was entered into after the expiry of the contract on 5 December 2003, ESPN was therefore not entitled to make any claim for the period 5 December 2004 to 5 June 2005.

ICC in its counter affidavit had stated, "The Tribunal has no jurisdiction to entertain this petition; that the service contract dated 5 December 2003 provides for arbitration, and that ESPN even though a company incorporated in India is in reality foreign controlled, as such, it has no right/locus standi to enter into agreement with any of the companies in India without permission from the government of India".

Responding to the objections raised by the MSO, the Tribunal stated that it had the jurisdiction to adjudicate on this matter.

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