Saravana Prasad Vs Endemol India Private Limited & Anr (Bombay High Court)
Bombay High Court has partially set aside an order issued by an Arbitral Tribunal, ruling that a One Person Company (OPC) director cannot be held personally liable for the company’s obligations under an interim arbitration order. The High Court’s decision, delivered in the case of Saravana Prasad vs. Endemol India Private Limited & Anr., provides clarity on the scope of powers exercised by arbitral tribunals under Section 17 of the Arbitration and Conciliation Act, 1996, particularly concerning OPCs and the principle of limited liability.
The case involves a dispute between Innovative Film Academy Private Limited (“Innovative”), a one-person company formed by Mr. Saravana Prasad (“Prasad”), and Endemol India Private Limited (“Endemol”). Innovative had entered into a “Production Agreement” with Endemol on March 10, 2021, for the creation and delivery of episodes for the “Masterchef” television show franchise in various South Indian languages.
Background of the Dispute
Endemol delivered episodes in Tamil and Telugu and claimed outstanding dues of approximately Rs. 10.40 crores from Innovative based on four invoices. While Innovative had paid a sum of Rs. 4.45 crores and Rs. 1.08 crores was adjusted against another contract, the remaining Rs. 10.40 crores formed the core of the dispute. This outstanding amount triggered arbitration proceedings.
