Karan Johar’s Dharma Productions has approached the Bombay High Court seeking urgent interim protection in a contract dispute with a production partner. The company wants the court to preserve status quo in matter until arbitration resolves the disagreement.
Karan Johar’s Dharma Productions lodged a petition with the Bombay High Court.
They are urgently seeking interim protection under Section 9 of the Arbitration and Conciliation Act, 1996, following the sudden termination of a film contract by the other party, referred to as Humble.
Initially scheduled for February 12, this case underscores the essential role of courts in maintaining the integrity of arbitration processes amidst commercial conflicts, with the next hearing due on February 18 before Justice Sandeep Marne.
This situation arises as the Indian entertainment industry grapples with financial strains in the wake of the pandemic, amplifying the need for prompt judicial action to stave off project disruptions.
Dharma Productions, a leading film studio established by the late Yash Johar and now overseen by his son Karan Johar, has built a formidable legacy with blockbuster hits such as Kuch Kuch Hota Hai and the Kabhi Khushi Kabhie Gham series, alongside recent successes like Rocky Aur Rani Kii Prem Kahaani. Renowned for its extravagant productions and celebrity collaborations, Dharma often engages in co-production agreements that encompass rights sharing, financial backing, and creative authority.
The respondent known as “Humble” in legal documents, likely referring to Humble Motion Pictures or a similar company has reportedly invoked a termination clause in their agreement with Dharma. While the specifics of the contract remain undisclosed due to confidentiality, typical disputes in such cases revolve around payment defaults, creative disagreements, production delays, or violations related to intellectual property.
The cancellation of film agreements can trigger severe repercussions, including halted shoots, stranded talent, and lost investments running into crores. Legal experts emphasize that Bollywood contracts frequently incorporate arbitration clauses to circumvent lengthy litigation; however, terminations often lead to Section 9 petitions to freeze the existing situation.
Dharma’s move indicates a strong prima facie claim, aimed at preventing Humble from taking any actions that might affect assets or compromise the arbitration outcome.
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Central to Dharma’s petition is Section 9 of the Arbitration and Conciliation Act, 1996 a provision that empowers courts to grant interim measures before, during, or after arbitration proceedings but before an award is issued.
As noted in reports,
“The petition filed under Section 9 of the Arbitration and Conciliation Act has sought urgent interim protection during the pendency of arbitration.”
This section enables courts to implement property preservation measures, grant interim injunctions, or appoint receivers, mirroring provisions in the Code of Civil Procedure, 1908. For Dharma, the requested relief likely includes restraining Humble from exploiting film rights, utilizing securities, or entering into competing deals.
The urgency of this matter arises from the time-sensitive nature of film projects, where delays could render arbitration irrelevant if assets are depleted.
This action reflects a proactive arbitration strategy, wherein parties seek judicial support to uphold arbitration, consistent with the Act’s pro-arbitration spirit following the 2015 amendments.
Dharma’s petition was first addressed on February 12 before Justice Sandeep Marne of the Bombay High Court.
Reports confirm that “the petition was listed on February 12 before Justice Sandeep Marne when Humble sought time to file a reply.”
The court granted this request, rescheduling the hearing to February 18 to give Humble an opportunity to respond to the ex-parte urgency.
This procedural measure is standard in Section 9 matters, ensuring equitable treatment while expediting commercial disputes under the Commercial Courts Act, 2015.
Justice Marne, known for dealing with intricate intellectual property and contract cases, will evaluate Dharma’s claims on various grounds: existence of an arbitration agreement, prima facie validity of the claims, balance of convenience, and risks of irreparable harm. Observers expect detailed affidavits and potentially supporting financial documents or project timelines, setting the stage for interim decisions that could significantly influence the arbitration’s course.
Section 9 is a fundamental component of India’s arbitration framework, derived from UNCITRAL Model Law Article 9. It strikes a balance between party autonomy a core principle of arbitration and judicial oversight to prevent misuse.
Dharma’s legal team will likely argue that Humble’s termination lacked notice or justification, violating the implied good faith principle under Section 16 of the Indian Contract Act, 1872.
Termination without an arbitration referral breaches the dispute resolution clause of the agreement, necessitating anti-suit-like injunctions. On the other hand, Humble may defend its position with claims of force majeure (perhaps linked to the pandemic) or cite a material breach by Dharma.
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The February 18 hearing could result in provisional relief, testing Justice Marne’s judicial discretion.
This scenario illustrates the evolution of Section 9: shifting from broad allowances to more restrained interventions post–Bharat Aluminium Co. v. Kaiser Aluminium Technical Services (2012), emphasizing competence-competence principles. Success for Dharma would reinforce the courts’ role as allies in arbitration, while a denial would indicate strong tribunal authority.
Notably, the Bombay High Court is recognized for its efficiency, with an average disposal time for Section 9 petitions under 30 days, making it a favored venue for disputes centered in Mumbai.