Entertainment Network India Limited (ENIL) will have to keep paying royalty to the Indian Performing Right Society Limited (IPRS) for broadcasting songs via its seven FM Radio stations in seven metros, as the Bombay high court on Tuesday struck down an arbitral award holding that the broadcaster was not required to obtain a licence from the copyright society and pay royalty.
Justice RD Dhanuka dropped the earlier award on the grounds of jurisdiction, holding that the issues raised in the arbitral proceedings were ‘incapable of being settled by arbitration’. “In my view, the dispute of this nature can be decided only by a Court of law and not in the arbitration proceedings,” the judge said.
The dispute pertained to payment of royalty by the ENIL, which operates radio channels in Mumbai, Chennai, Indore, Kolkata, Pune, Ahmedabad and Delhi, to the IPRS for broadcasting recorded songs. As per the agreement executed in July 2001, the copyright society had issued a licence to the broadcaster to air the songs against a payment of royalty. But a dispute arose between the two parties five years later.
While the IPRS claimed that the broadcaster had breached the licence agreement, the ENIL sought refund of the amount paid claiming it was not liable to obtain licence and pay royalty. The dispute was later referred by the high court to a sole arbitrator, a former judge of the Supreme Court. The arbitrator declared his award on December 6, 2011, upholding broadcaster’s claim that it did not require licence and pay royalty. In addition, the arbitrator refused to order the copyright society to refund excess royalty paid by the broadcaster, thus prompting both sides to challenge the decision in the high court.