Delhi High Court rules in favor of L&L Partners’ client Percept Advertising
Justice Vibhu Bhakru set aside the order passed by the arbitral tribunal
The Delhi High Court has ruled in favor of Percept Advertising Limited in its case against Bharat Sanchar Nigam Limited (BSNL).
Percept was advised by L&L Partners (formerly Luthra & Luthra Law Offices) and its Litigation Partner Venancio D’Costa and his team comprising Astha Ojha (Managing Associate) and Gauri Goel (Associate).
Percept was an empaneled advertising agency for BSNL. It was awarded a Work Order to direct a TV Commercial (TVC) with Brand Ambassador Deepika Padukone, producers Film Farms India Pvt. Ltd., and Director Imtiaz Ali.
As Padukone failed to show up on the day of the shooting, Percept requested BSNL to provide alternate dates to reschedule the shooting of the commercial. Meanwhile, it had already made advance payments to Film Farms for arranging the TVC.
However, instead of providing alternate dates, BSNL abruptly short-closed the Work Order given to Percept, which, on being constrained, invoked the arbitration clause.
Considering the claims made by Percept, the arbitrator (appointed by BSNL, as per the Agreement) noted that BSNL had informed Percept about Padukone’s availability for shooting the TVC. The arbitrator also accepted that Percept had no control regarding the availability of Padukone for the shooting, since it had no contract with her.
However, the arbitral tribunal rejected Percept’s claim on the ground that there was no proof that the amount paid by it to Film Farms had been refunded or adjusted against any other work/contract.
Percept then filed objections under the Arbitration and Conciliation Act, 1996, before the Delhi High Court.
The bench of Justice Vibhu Bhakru, however, allowed the objections and set aside the order passed by the tribunal on the ground that it was manifestly erroneous and vitiated on the grounds of patent illegality.