Palador drags UTV to court

Mumbai, Nov 1, 2007 : The recent settlement arrived between Palador and its much larger ex-partner UTV has run into troubled waters, with Palador dragging UTV to High Court. Palador has filed a case yesterday under Section 34 of the Arbitration & Reconciliation Act of 1996 & is in the process of filing a few more including breach of trust, breach of non-disclosure agreements, defamation, damages & violation of intellectual property. The company will demand upwards of Rs. 15 crores via its various suits.

As part of the legal decree passed by the sole arbitrator, both UTV and Palador had to abide by terms of the consent award. However whereas Palador has kept its side of the bargain, UTV's has breached the same.

The reason for the breach include:

Authenticity of the amount being claimed by UTV
UTV's denial to return all the materials that belong to Palador
UTV's refusal to comply with clause 2 of the settlement agreement that demanded it to furnish documents to effectively return the movies to Palador on payment. Further, UTV's breach of provisions of the settlement agreement, by continuing to use Palador's brand Olive.

These and other factors have led Palador 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 crores (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. Fed-up 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.

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.

UTV was obliged to return the brand Olive collection & the materials of the said films that were in UTV's possession. In return, Palador was to re-imburse UTV with the exact expenses incurred on the venture. Palador has recently raised US$ 4 million in investment and spent over Rs. 6 crores 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, in a startling development Palador realized 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 has more materials in its possession than it had declared in the settlement (this includes some rare posters, photographic material, priceless short films and negatives). There are also personal belonging of the founders of Palador and its team ? that were retained by UTV on sacking 20 people with a 40 minute notice, when it terminated the relationship on flimsy allegations (these were later unconditionally withdrawn by UTV).

On being confronted by Palador, UTV flatly denied having them in hand (Palador has signed acknowledgements from UTV of the same, as evidence) or assuring a return of the same upon receipt of payments ? an act that clearly showed Palador of the malafide intent. UTV has also refused to comply with the documentation required by Palador's lawyers. Further, it was shocked to receive notices from parties who were supposed to have been paid as per UTV's claims, still referring to Palador's catalogue and continuing use of Olive ? the brand conceived and owned by Palador. Palador has also not been furnished with proof of payment of the claimed amount of Rs. 4 crores, despite sending notice to UTV under section 3 of the arbitration act after the settlement. UTV has also falsely claimed that there were meetings for "negotiations" held between the two parties. Palador has asked the courts to compel UTV to furnish proof of all the claims & allegations, before it shells out money to the publicly listed company, which was consistently provided with ideas, concepts, business plans and other services by Palador and its various partners including independent studios.

Gautam Shiknis, Founder & Managing Director of Palador, says "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 itself, the employees that were thrown out of the door with 40 minutes notice and for the love of directors we worship."

Says Mr. Mahesh Mathai, legendary ad film maker, and the director of two films including 'BHOPAL EXPRESS', and also an investor in Palador, "Whatever has happened is rather unfortunate. However, Palador is a company brimming with ideas. It is the vision of Palador and its founder Gautam and Mohan that has prompted us to invest in them. And we will continue to support them in whatever manner possible in the future. I am sure that justice will prevail in the end."

Despite the serious setbacks it received because of the UTV relationship, Palador is on a roll - and has performed far better since its separation from UTV. It has invested more resources on cinema in 90 days, than over 8 months of the partnership with UTV. It has expanded its catalogue to nearly 1000 films, as against under 200 and moved into a sprawling 12,000 sq ft office in the heart of Mumbai at Parel. Additionally, not only has it raised US$ 6 million in funding, it is in final stages of paperwork to raise another US$ 10 million from a large institutional investor. Palador has bonds with some of the biggest names in India to distribute its catalogue, and intends to unveil the same at an event to be held in the coming weeks.