HomeInsightsHigh Court grants summary judgment and orders payment of debt plus interest for breach of media rights agreement

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The claimant, New Zealand Cricket (Incorporation), was the national governing body of cricket in New Zealand and owned the rights to broadcast cricket matches played in New Zealand.  The defendants, Neo Sports Broadcast PVT Ltd and Nimbus Communications Ltd, were both involved in sports broadcasting in India.

In 2013, New Zealand Cricket entered into an English law and jurisdiction Media Rights Agreement with the defendants, pursuant to which New Zealand Cricket granted a licence to Neo Sports to broadcast cricket matches played in New Zealand until 2020 in return for a fee, which fee was guaranteed by Nimbus.

Neo Sports failed to pay certain sums owing under the Agreement.   New Zealand Cricket served notice on Neo Sports formally requesting Neo Sports to remedy its default.  Under the Agreement, failure to comply with the request gave New Zealand Cricket the right to terminate the Agreement.  Neo Sports did not comply and New Zealand Cricket exercised its right to terminate the Agreement by giving written notice of termination.

New Zealand Cricket commenced proceedings in November 2014.  Service was accepted and an acknowledgement of service was filed.  However, the defendants failed to file a defence by the due date or subsequently.  Eventually, New Zealand Cricket applied for summary judgment.  The defendants did not file any evidence or make any submissions in response to the application.

In a judgment that has only recently become available, Mr Justice Leggatt found that the defendants’ silence was “telling and would be a sufficient reason in itself to grant the application”.  However, he thought it right to examine the position further and to consider arguments that were made in correspondence on behalf of Neo Sports, albeit that those arguments had not subsequently been maintained.

In a letter from Neo Sports to New Zealand Cricket, Neo Sports complained that, after the date for payment had elapsed and the formal request for payment had been made, conversations had taken place between New Zealand Cricket and other organisations in India with regard to a possible sale to them of rights if Neo Sports failed to pay the sum due to New Zealand Cricket and the Agreement became consequently terminated.  Neo Sports asserted that those conversations amounted to a material breach of the Agreement, incapable of remedy, which gave Neo Sports the right to terminate the Agreement.

In Leggatt J’s view, however, it was “absolutely plain that such discussions did not amount to a breach of any obligation under the Media Rights Agreement”.  Specifically, Leggatt J said, it could not reasonably be argued that engaging in discussions with third parties about a possible sale of rights in the future infringed the exclusivity provisions.  Equally, it was not reasonably arguable that such discussions involved any form of bad faith or constituted dishonest or uncommercial dealing, even if it were arguable that a covenant of good faith could be implied into the Agreement.  A party that was in breach of contract and that faced termination of the contract within a matter of days if it continued to fail to comply with its obligations could not complain, Leggatt J said, let alone claim bad faith, if the other party to the Agreement had begun to make enquiries as to how to mitigate its loss in the event that the breach was not remedied.

As a result, Leggatt J found, the defendants had no real prospect of successfully defending the claim.  Accordingly, the application for summary judgment succeeded and Leggatt J granted summary judgment to New Zealand Cricket for the amount of the outstanding debt, together with interest.  (New Zealand Cricket (Incorporation) v Neo Sports Broadcast PVT Ltd [2016] EWHC 3615 (Comm) (2 December 2016) — to read the judgment in full, click here.

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