BOMBAY HIGH COURT PAVES WAY FOR RELEASE OF “GHOUL” ON NETFLIX; DENIES AD-INTERIM RELIEFS TO STAR INDIA ON GROUNDS OF DELAY [READ ORDER]

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Star India Private Limited had filed a commercial arbitration petition in Bombay High Court under Section 9 of the Arbitration and Conciliation Act, 1996 seeking urgent ad-interim reliefs against Reliance Big Entertainment Pvt. Ltd. and Netflix Entertainment Services India LLP from in any manner exploiting the film ‘GHOUL’ directed by Patrick Graham and starring Radhika Apte.

The petition was filed on August 20, 2018. The Bombay High Court vide order dated August 23, 2018 refused to grant any ad-interim reliefs to Star primarily on ground of gross delay in approaching the Court as the global release of the film was fixed at 4.00 am on August 24, 2018.

Star India’s claim was that under an “Underproduction Film Assignment Agreement” dated June 29, 2017 that was entered into by and between Star India Private Limited and Reliance Big Entertainment Pvt. Ltd in respect of 5 films, Star India acquired from Reliance Big, exclusive Satellite, Cable Television and Terrestrial Rights and certain non-exclusive rights including digital rights in respect of the audio-visual work/cinematograph film/mini series titled ‘GHOUL’.  Star India thus claimed that Netflix has no rights to release the film and the same was in violation of their rights.

Star contended that they came to know about the alleged violation of their rights on August 1, 2018 through an article on the NDTV site. With respect to the delay in filing the petition for seeking an injunction, the Petitioner relied on Midas Hygiene Industries P. Ltd. and Anr vs. Sudhir Bhatia and others wherein it was held that mere delay in bringing action is not sufficient to defeat grant of injunction is such cases.

On hearing the arguments of both sides, Justice S.J Kathawalla seemed unconvinced by the allegations of Star and was of the view that Star India was not entitled to urgent ad-interim reliefs restraining Netflix from releasing the said film on account of the gross delay in approaching the Court. He observed that several media reports regarding the release of the series ‘Ghoul’ by Netflix had flooded the public domain from February 2018.  He further added that it was quite improbable for the petitioner to not be aware about the release of the series by Netflix owing to the existence of its own network of TV Channels and its own digital platform, “Hotstar”.

The Judge also brought to the attention of the Petitioner, who was unaware of the rights created in favor of Netflix , the exclusive nature of assignment by in favour of Netflix by pointing out at an article in Hindustan Times dated 20th February, 2018, which read “From drama to horror to mystery, these broad and diverse stories, upon completion, will debut exclusively to over 117 million Netflix members in 190 countries”.

In view of the above contentions and the fact that Netflix had incurred enormous costs and efforts to ensure the release of the said series on its platform, the Court rejected the Petitioner’s prayer of urgent ad-interim relief and allowed Netflix to release the series ‘GHOUL’ on August 24, 2018 at 4.00 a.m. on its platform, subject to further orders of the Court and final disposal of the Petition. The Arbitration Petition has been placed for hearing and final disposal on September 7, 2018.

The Bombay High Court has in several film related disputes not entertained pleas close to the release of the films. It is surprising that Star India approached the court at such a belated stage despite having what appears to be a good case on merits.

Ghoul is produced by Phantom Films along with Ivanhoe and Blumhouse.  Anil Ambani owned Reliance Big Entertainment had partnered with Phantom Films Pvt. Ltd in a 50:50 joint venture. Reliance holds 50% shareholding in the combined business. It appears that there has been some overlap of rights granted by Reliance to Star India and by Phantom to Netflix. If Star India has prior claim on the rights, it would have to be seen if the court protects the interest of Netflix who seems to be a subsequent bona fide purchaser. While the entire facts of the case are not known, based on the facts mentioned in the order, Star India only has non-exclusive digital rights in Ghoul and the question before the Court qua Netflix would be if Star can specifically enforce this non-exclusive right and seek injunction.

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