Decided on March 25,2019

Arka Media Works Appellant
K Productions Respondents


Sanjay Kumar, J. - (1.)M/S.Arka Media Works, Hyderabad, a partnership firm, seeks appointment of a sole Arbitrator under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996 (for brevity, 'the Act of 1996'), to resolve its claim for a sum of Rs.17,60,00,000/- raised against M/s.K.Productions, Chennai, a proprietary concern, and S.N.Rajarajan, its Proprietor.
(2.)The applicant firm is the producer of the feature film Baahubali and entered into a Theatrical Rights Agreement on 28.01.2017 with the first respondent-proprietary concern granting it certain exploitation rights in Tamil, Telugu, Hindi and Malayalam languages on minimum guarantee basis within the territory of the State of Tamil Nadu for a period of five years. According to the applicant firm, the respondents herein, having made part payment of the consideration in terms of the aforestated Theatrical Rights Agreement dated 28.01.2017, committed default in payment of the balance consideration leading to execution of a Loan Agreement by and between the parties on 29.04.2017. As per this Loan Agreement, the first respondent-proprietary concern, represented by the second respondent, acknowledged the default committed to the tune of Rs.15.50 crore and agreed that this amount should be treated as a loan. The first respondent-proprietary concern agreed to repay this amount within a period of fifteen days from the date of execution of the Loan Agreement and undertook liability to pay interest @ 36% per annum in case of default in payment of the loan amount. Disputes having arisen between the parties thereafter, the applicant firm invoked the arbitration agreement in Clause 9.7 of the Loan Agreement dated 29.04.2017 and addressed arbitration notice dated 27.10.2018 to the respondents. However, the respondents did not choose to reply thereto. Hence, this application.
(3.)Notice having been ordered upon this application on 28.12.2018, the respondents were duly served on 21.01.2019. Ms.Gorantla Sri Ranga Pujitha, learned counsel for the applicant firm, also effected service of notice upon the respondents pursuant to the permission granted by this Court and filed acknowledgment cards in proof of service. Despite the same, the respondents did not choose to enter appearance before this Court.

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