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Palador drags UTV to court

02-November-2007
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Palador drags UTV to court

Palador has filed a case against UTV under Section 34 of the Arbitration & Reconciliation Act of 1996, and is in the process of filing a few more, including breach of trust, breach of non-disclosure agreements, defamation, damages and violation of intellectual property. The company will demand upwards of Rs 15 crore as compensation through its various suits.

The reason for the breach includes authenticity of the amount being claimed by UTV; UTV's denial to return all the materials that belong to Palador; and UTV's refusal to comply with Clause 2 of the settlement agreement that demanded UTV to furnish documents to effectively return the movies to Palador on payment. Further, according to Palador, UTV breached provisions of the settlement agreement, by continuing to use Palador's brand Olive Collection.

According to the settlement reached by the two parties, UTV was supposed to hand over clean possession of 75 films that are in joint custody of both players, along with necessary documents and declarations that allowed Palador uninterrupted use of the its classics.

Gautam Shiknis, Founder and Managing Director, Palador, said, “We are a peace-loving company that has not yet reacted to the various harassments meted out by UTV in the past. But, there is a limit to how much one can tolerate. We stood through having our business plan being illegally hived off into another company, false allegations made against us in the global media, and having our precious films maliciously claimed. We were left with no other recourse but to take this stand and deliver justice to the company, the employees that were thrown out of the door with a 40-minute notice, and for the love of the directors we worship.”

UTV was obliged to return the brand Olive Collection and the materials of the said films that were in UTV's possession. In return, Palador was to reimburse UTV with the exact expenses incurred on the venture. Palador has recently raised $ 4 million in investment, and spent over Rs 6 crore within a span of 90 days towards the cause of quality cinema, and has confirmed its intent to pay UTV what was legitimately owed.

However, according to the Company Secretary and Legal Head of UTV Software Communications Ltd, “Both parties entered into written and binding mutual consent terms, passed by the learned arbitrator, directing Palador, Gautam Shiknis and Mohan Polamarsetty to pay to UTV Rs 4.03 crore within 90 days from the date of the award. The said 90 days expired on October 31, 2007. Palador failed to pay the agreed amount and hence, UTV became the absolute owner of 75 films.”

Defending this breach, officials from Palador informed that the company realised that the moneys being claimed by UTV were inflated, and it was not adhering to its promise of providing Palador with the details of how the amount was arrived upon. Additionally, Palador has discovered through its various partners that UTV had more materials in its possession than it had declared in the settlement, which includes some rare posters, photographic material, priceless short films and negatives. There were also personal belonging of the founders of Palador and its team, which were retained by UTV on sacking 20 people with a 40-minute notice, when it terminated the relationship on flimsy allegations, which were later unconditionally withdrawn by UTV.

Palador officials added, “These and other factors have led Palador to believe that UTV intends to carry on its previous mistreatment of Palador, and prevent it from competing with its far superior catalogue in the World Cinema space, that is estimated at Rs 300 crore – a value publicly accepted by business analysts – by creating further hurdles and litigation via itself or third parties, soon after it receives moneys from Palador. Tired of the harassment, arm-twisting and highhandedness of UTV, and outraged with the consistent practice of reneging on its commitments, Palador has turned to the High Court for relief and action.”

On how unclear was Palador in terms of legal deals, Shiknis replied, “We have all our legal deals cleared. The problem is from UTV, and not us. And I guess the only resolution to the whole chaos is that we wait for the decision from Court.”

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