Delhi High Court grants interim relief to Culver Max in dispute over unpaid dues from MX Media

The Delhi High Court recently came to the aid of Culver Max Entertainment Private Limited (earlier known as Sony Pictures Networks India) to ensure that it does not lose the means to recover money it has to get from MX Media (owner of MX Player), which is facing liquidation proceedings in Singapore [Culver Max Entertainment Private Limited v. MX Media and Entertainment Pte Ltd.].Justice Prathiba M Singh passed an order directing MX Media to retain the amount allegedly owed to Culver Max, even if its assets are sold to a third party as part of liquidation proceedings initiated against its Singapore arm (MX Media & Entertainment Pte. Ltd).“It is directed that if any sale of assets of Respondent No.1 (MX Media) company takes place, it shall be ensured that a minimum amount of Rs. 31.25 Crores is retained by the Respondent No.1/2 companies in their bank accounts, till further orders of this Court,” the May 27 order stated..In 2021, Culver Max (then known as Sony Pictures) and MX Media had entered into a distribution agreement to broadcast copyrighted content owned by Sony Pictures through the MX Player platform. The two parties also agreed that disputes between the two would be settled through arbitration under the Indian Arbitration and Conciliation Act, 1996.While Sony (now Culver Max) made its content available for distribution on MX Player and raised invoices, MX Media failed to make several payments over time.Sony has claimed that this unpaid amount due from MX Media now stands at over ₹31 crores, although MX Media’s counsel has told the Delhi High Court that the amount due is slightly lesser after a reconciliation of account statements..In the meanwhile, another creditor sought to initiate proceedings to wind up MX Media in Singapore. The creditor’s application to wind up the company was initially allowed by the Singapore High Court, although the winding up proceedings were later stayed by the same Court till June 20. The stay was passed to allow MX Player to explore whether it can sell its business.While this was going on, Culver Max approached the Delhi High Court with apprehensions that it may not be able to secure the amount due from MX Media if all its assets are sold to a third party. In this regard, the production company filed a petition for interim relief under Section 9 of the Arbitration and Conciliation Act, 1996.In response, MX Media’s counsel informed the High Court that while there may be a sale transaction in the works, he is not at liberty to disclose the confidential details of the same. A binding agreement may be entered into in the next two weeks, the Court was told..Considering all these aspects, the Court directed that if at all a sale of MX Media goes through in the coming weeks, it should keep the disputed unpaid amount of ₹31.2 crores secured in its bank accounts, so that Culver Max’s claim remains secure.The Court has also asked MX Media to file its reply to Culver Max’s petition by July 15 and posted the case for further hearing on August 28. The Court further ordered that if the sale of MX Media goes through in the next two weeks, Culver Max must be informed of the same through an official communication.“It is also submitted on behalf of the Respondents (MX Media) that there is a reconciliation of the statement of account which may be required as the amount due as per the Respondents is slightly lesser than what is claimed to be due in the Petition. If so, let the reconciled statement of account be placed on record along with a reply. If required, after the transaction between Respondent No. 1 and the stated third party goes through in the next two weeks, officials of both parties are free to hold a reconciliation meeting,” the Court added..Senior advocate Gaurav Pachnanda, along with advocates Ruby Singh Ahuja, Vishal Gehrana, Ishan Gaur, Simranjeet, Megha Dugar and Threcy Joboy Lawrence represented Culver Max/ Sony Pictures. Senior Advocates Rajiv Nayyar and Jayant Mehta along with advocate Govind Singh Grewal represented MX Media and its subsidiaries. .[Read Order]