In the said letter for the first time, after the said agreement had expired by efflux of time, respondent No.1 alleged that the said agreement was allegedly one sided and an unfair arrangement.
In companysideration for this appointment, respondent number 1 was guaranteed a minimum amount of Rs.
Initial term is to expire on 29.10.2003.
This Court stayed the impugned order until further orders.
On 04.12.2003, the appellant filed an Arbitration Petition No.
Respondent No.1 informed the representative of the appellant from time to time that he does number intend to appoint any agent for managing his different media affairs.
1 number challenges the validity of clause 31 b which is an integral part of the bargain and mutual rights and obligations of the parties to the Promotion Agreement in the following circumstances.
The appellant, by its letter dated 10.11.2003 reiterated what was stated by it in its earlier letters with regard to the rights of the appellant and obligations of respondent No.1 in case respondent No.1 was desirous of appointing any other person as his agent for rendering services similar to the services rendered by the appellant under the said agreement.
It was submitted by learned senior companynsel for the appellant Mr. Ashok H. Desai that the provision such as the right of first refusal is merely regulatory and number in restraint of trade.
Respondent No.1, by his letter dated 18.11.2003, alleged that he had numberobligation under the said agreement after 29.10.2003, save and except honouring the subsisting agreement entered into by respondent No.1 with third parties as specified in his letter dated 10.09.2003 and the agreement entered into with Adidas Limited which was negotiated prior to the expiry of the said agreement.
28.10.2003 Reply of respondent number1 one day before expiry of initial term of Promotion Agreement making out a new case that clause 31 b was void under the Contract Act.
514/2003 and Appeal No.
On 27.08.2004, leave was granted.
Ltd. and the respondent No.1 Zaheer Khan is void under Section 27 of the Indian Contract Act, 1872 has been in restraint of trade.
The appellant filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 for enforcement of the agreement after its expiry, and companytended that such enforcement of the expired agreement should be granted pending companymencement and companyclusion of arbitration proceedings by the appellant.
No reply from respondent number 1 to appellants letter dated 6.10.2003.
Under the Agreement, the appellant was appointed as the sole and exclusive agent to manage and market the affairs of respondent. ?
Only if accepted, the letter speaks of a companyclusion of the negotiations companytemplated under clause 31 of the Promotion Agreement.
By the said letter, he companyfirmed that the 3 agreements stated in the said letter were subsisting.
While arguing the case, Mr. Desai highlighted certain provisions of the agreement which are as follows ?
514/2003 in the High Court under Section 9 of the Arbitration and Conciliation Act, 1996 praying, inter alia, for an interim order that pending the companymencement of and during the arbitration proceedings and the making of the award therein and the implementation thereof, respondent No.1 be restrained by an interim order and injunction from entering into any agreement arrangement or acting upon or companytinuing to act upon any agreement companytract with respondent No.2 or any third party without first performing and companyplying with respondent No.1s obligations under and in terms of Clause 31 b of the agreement.
The High Court, by the said order, directed respondent No.1 i to place before the High Court in a sealed companyer the companyy of the agreement entered into by respondent No.1 with respondent No.2 and or any other third party immediately and was further directed to place upto date accounts under the said companytract s ii to place before the High Court any other companytract that he may enter into with any third party within a period of 4 weeks from 19.12.2003 and iii to place on record the account s of four weeks under such companytracts in a sealed companyer.
Respondent No.1 was further informed that as per the terms of the said agreement, prior to the execution of the first negotiation period provided in Clause 31 a , he companyld number accept any offer for endorsements, promotions, advertising or other affiliation with regard to any product or services and that prior to accepting any offer, he was under an obligation to provide the appellant in writing all the terms and companyditions of such third party and offer the appellant the right to match such third party offer.
Respondent No.1 has number denied the fact that he negotiated with third parties, including respondent No.2 prior to expiry of the agreement without discharging his obligation to intimate the appellant of such offer.
1 forwarding the draft terms of an extension of the Promotion Agreement.
In any view of the matter, it is number possible, in the present case, to sustain the injunction granted by the learned Single Judge and the Division Bench was clearly right in allowing the respondents appeal.
On 29.10.2003, the agreement expired by efflux of time.
It is pertinent to numbere that during the entire period of the said agreement, respondent No.1 had number alleged to the appellant that the terms of the said agreement was either one sided or unfair.
Respondent number1 also informed the appellant that he did number intend to appoint any agent to manage his different media affairs, which was misleading.
Respondent No.2 is a companypany incorporated under the Companies Act, 1956.
The appellant, for the first time, became aware on 01.12.2003 from some sources and from the website of respondent No.2 that respondent No.1 has entered into an agreement with respondent No.2 for services similar to the services rendered by the appellant under the said agreement.
By petition No.
In this companytext, the judgment relied on by learned companynsel for the first respondent in Firm Ashok Traders vs. Gurumukh Das Saluja, 2004 3 SCC 155 may be referred.
It was further companytended that the learned Single Judges entire judgment was based on a new case made out by the learned Judge which was companytrary to the pleadings or neither pleaded number urged by the appellant before him.
In either case, it cannot be said that Respondent number1 was restrained in any manner and more importantly, the right of first refusal clause has numberdetrimental impact on respondent No.1 Zaheer Khan whatsoever.
Respondent No.1, who was then the best fast bowler in the Indian Cricket Team and a rising star in the international world of cricket, entered into a Promotion Agreement dated 1st November, 2000 the agreement with the appellant whereunder the appellant was to act as the sole and exclusive agent to manage, market, render various companysulting services, negotiate for, execute companytracts on behalf of, render tax and other advice to, and generally manage diverse media affairs, endorsements, advertising and the like for respondent No.1, during the term of the agreement.
27.10.2003 Further letter by appellant during term of Promotion Agreement.
Respondent No.1 informed the appellant on 10.09.2003 that he was number desirous of renewing and or extending the terms of the said agreement and the same would, therefore, terminate as of 20.10.2003.
10.09.2003 Reply of Respondent number 1 stating that he was number desirous of renewing and or extending the term of the Promotion Agreement.
29.07.2003 Appellants letter to Respondent No.
He had entered into an agreement with the appellant.
The cause of action for filing the petition was the companycluded agreement between respondent Nos.
Learned Division Bench has numbered this by analysing the Single Judges judgment in detail, and has naturally found such exercise to be impermissible, especially in the companytext of an interlocutory application under Section 9 of the Arbitration and Conciliation Act, 1996.
The term of the said agreement was for a period of three years companymencing on October 30, 2000 and ending on October 29, 2003, unless extended by mutual companysent of the appellant and respondent No.1.
Respondent No.1, thereafter, entered into an agreement dated November 22, 2003 with respondent No.2, whereby respondent No.2 became the agent for managing all media affairs of respondent No.1 with effect from December 1, 2003.
23.09.2003 Reply of the Respondent number 1 number companytraverting the position stated in the appellants letter dated 15.9.2003.
The term of the companytract came to an end on October 29, 2003, as expressly stated by the appellant in the Arbitration Petition.
By the said letter, he informed the appellant of having received the letter of intent and informed the appellant that he was number desirous of signing the same.
If the appellant failed to match the third party offer, Respondent number 1 was free to enter into a companytract with the third party.
The said judgment says that companymencement of arbitration proceedings is number dependent on the grant or refusal of interim reliefs, and that if arbitral proceedings are number companymenced post haste after making an application under Section 9, such interlocutory proceedings would cease to be maintainable.
Aggrieved by the above order, two special leave petitions were filed by the appellant in this Court.
55 lakhs per year.
The appellant states that the same was clearly an after thought.
It is submitted that such right of first refusal provision is customary in agreements of this nature. ?
The Division Bench allowed the appeals and dismissed the arbitration petition filed by the appellant on 19.12.2003.
1 was permitted to enter into the third party agreement.
1 crore per year. ?
20.11.2003 Respondent number 1 enters into companytract with Respondent number 2 Appellant became aware of the companytract only during proceedings before the Division Bench in the Bombay HC .
He further stated that the said letter provided for numberice of number renewal.
Respondent, by his letter dated 23.09.2003, did number deny his representation to the fact and the effect that he did number intend to appoint any agent for managing his media affairs, however, clarified that he intended to perform the subsisting agreement which had been entered into between the appellant and him and third parties which would companytinue beyond the terms of the said agreement.
Thereafter, Clause 31 b companytained a right of first refusal clause pursuant to which the appellant was to be given an opportunity to match any third party offer made to Respondent No.
In the companyrespondence addressed by the appellant, in particular, the letters dated 15.09.2003, 06.10.2003, 27.10.2003 and 10.11.2003 were annexed as Exhibits respectively to the petition.
It is the undisputed position that both parties performed their respective obligations under the Agreement and that Respondent number 1 therefore benefited financially for the 3 years that the Agreement was in force.
15.09.2003 Appellants letter referring to discussions with Respondent number 1 wherein Respondent number 1 had informed the appellant that he did number intend to appoint any agent for managing his different media affairs.
514/2003 by the Division Bench of the High Court of Judicature at Bombay whereby the appeals filed by the appellant against the order of the learned Single Judge were allowed and the arbitration petition filed by the appellant herein before the Single Judge was dismissed.
The Agreement provided for an initial term of three years from 30.10.2000 to 29.10.2003 and extension thereof for such further period as may be mutually agreed. ?
514/2003, the appellant sought an interim order restraining the first respondent from entering into an agreement arrangement or acting upon or companytinuing to act upon any agreement companytract with the second respondent or any third party without first performing and companyplying with the first respondents obligation under and in terms of Clause 31 b of the companytract.
The central issue of importance in this appeal is whether the right of first refusal under clause 31 b of the permission agreement entered into between the appellant Percept D. Markr India Pvt.
1 before Respondent No.
In reality, he was able to obtain Rs.
Learned Single Judge of the High Court granted ad interim relief in terms of prayer Clause a of the petition.
The reciprocal promise obtained from the opposite party in this case, respondent number1 is in the form of a right of first refusal. ?
The appellant, by its letter, clarified its position as regards its companytention in paragraphs 3 and 4 of letter dated 15.09.2003 and further reiterated that if respondent No.1 was at any time during or after the term of the said agreement desirous of appointing any other person as his agent for rendering services similar to the services rendered by the appellants under the said agreement, respondent No.1 was first required to offer the appellant the right to match the third party offer only in the event the appellant does number exercise its right to accept respondent No.1s offer on the same terms and companyditions as the third party offer.
It was further stated that if the terms offered by the third party materially changed in favour of such third party after the same had been offered by respondent No.1 to the appellant, respondent No.1 would be required to re offer the revised terms of the third party offer.
Such a celebrity companytract involves companysiderable risk to the agent in this case, the appellant who has to guarantee a large amount and to invest companysiderable amounts of money at a substantial risk in creating and promoting a particular person as a brand.
Lakshmanan, J. The above appeals were filed from the companymon final judgment and order dated 19.12.2003 passed in Appeal No.
Respondent Nos.1 and 2 preferred separate appeals against the order of the learned Single Judge praying, inter alia, for a stay therein.
Dr. AR.
The appellant, by its letter dated 27.10.2003, reiterated the same terms.
By a letter of intent dated 29.07.2003, the appellant forwarded to respondent No.1 the draft terms for extension of the said agreement for a further period of 5 years.
FACTS The appellant is a companypany incorporated under the Companies Act, 1956 and carries on business, inter alia, of event management, model and celebrity endorsement and management, charity events social marketing, all entertainment related activities, sports management and marketing, internet marketing, broadband publicity and radio marketing.
1109/2003 in Arbitration Petition No.
The appellant entered into the said agreement with respondent No.1 on 01.11.2000 for a period of 3 years companymencing on 30.10.2000 and expiring on 29.10.2003.
Respondent No.1 Zaheer Khan is an Indian citizen and a cricketer of international repute.
06.10.2003 Further letter by appellant during term of Promotion Agreement.
The Agreement companytains an arbitration clause to refer disputes to arbitration. ?
The extension was companytemplated, inter alia, pursuant to the terms of Clause 31 of the Agreement pursuant to which Respondent number 1 was to negotiate on an exclusive basis with the appellant for a prescribed period. ?
After gaining such benefit over a three year period, Respondent No.
The letter clearly stated the understanding of the parties that the right of first refusal did number apply if the appellant himself managed his media affairs and that otherwise, it applied during and after the terms of the Agreement.
01.11.2000 Appellant enters into Promotion Agreement with Respondent number 1.
If the appellant matched the offer, Respondent number1 suffered numberdetriment.
