Televisión Autonómica Valenciana, S.A. v Imagina Contenidos Audiovisuales, S.L.

JurisdictionEngland & Wales
CourtChancery Division
JudgeMr Justice Arnold
Judgment Date08 February 2013
Neutral Citation[2013] EWHC 160 (Ch)
Docket NumberCase No: HC12D02407
Date08 February 2013

[2013] EWHC 160 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Rolls Building

Fetter Lane, London, EC4A 1NL

Before:

The Hon Mr Justice Arnold

Case No: HC12D02407

Between:
Televisión Autonómica Valenciana, S.A.
Claimant
and
Imagina Contenidos Audiovisuales, S.L.
Defendant

Stuart Isaacs QC (instructed by Berwin Leighton Paisner LLP) for the Claimant

Nikki Singla (instructed by Norton Rose LLP) for the Defendant

Hearing date: 31 January 2013

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

Mr Justice Arnold

Introduction

1

The application before the Court is an application by the Defendant ("Imagina") for a stay of these proceedings ("the English Proceedings") until after judgment in proceedings brought by Imagina against the Claimant ("TVV") in the Paterna Court of First Instance in Valencia, Spain ("the "Spanish Court" and "the Spanish Proceedings"). The application is made pursuant to Article 27(1) alternatively Article 28(1) of Council Regulation (EC) No. 44/2001 ("the Brussels I Regulation") alternatively section 49(3) of the Senior Courts Act 1981.

The parties

2

Imagina and TVV are both Spanish companies. Imagina is in the business of acquiring and managing broadcasting rights in audiovisual works and sub-licensing those rights. TVV is a publicly-owned broadcaster for the Region of Valencia.

The Agreement

3

Both the Spanish Proceedings and the English Proceedings relate to an agreement entitled "Television Sublicensing Rights Agreement in relation to FIA Formula One World Championship" entered into between Imagina and TVV on 20 July 2009 ("the Agreement").

4

In April 2007 Imagina acquired certain rights to broadcast the FIA Formula One World Championship ("the Championship") for the 2009–2013 seasons in Spain and Andorra from Formula One Administration Ltd. Usually the Championship season starts in around March and finishes in November each year.

5

In about March or April 2008 Imagina granted Gestoria de Inversions Audiovisuals La Sexta, S.A. ("La Sexta") a sub-licence to broadcast the Championship for the seasons 2009–2013 throughout Spain and in any official language in Spanish except Valencian. La Sexta is a privately-owned broadcaster.

6

Under the Agreement Imagina sub-licensed to TVV the right to broadcast the Championship within Valencia and in the Valencian language for the 2010–2013 seasons (and to retransmit in the 2009 season).

7

The Agreement consists of a short main document with eight Annexes. Annex 1 contains the principal terms. Clause 1.1 defines the "Primary Rights" granted, which are said to be "Shared". Clause 1.3.1 explains that "Shared" "means shared actually with La Sexta" and briefly describes the rights granted to La Sexta. By clauses 1.3.2 and 1.3.3 Imagina undertakes not to grant various rights in the same language and in the same territory to any other party, with certain exceptions. By clause 1.4 Imagina reserves various rights to itself.

8

Clause 2.2 provides that the period of the Agreement is from 1 January 2010 to the "Expiry Date", namely 31 December 2013. Clauses 7.1–7.3 set out a number of grounds on which Imagina may terminate the Agreement before then. Clause 7.5 enables TVV to terminate the Agreement if Imagina fails to perform any of its material obligations in the manner specified and such failure is either not capable of being remedied or is not remedied within 14 days of notice.

9

Clause 17.1 provides that the Agreement is governed by English law. Clause 17.3 provides that the Agreement is in English, and in the event of translation into any other language the English version shall prevail.

10

Clause 17.2 provides as follows:

"Both of the Parties agree that the English Court shall have exclusive jurisdiction to settle any disputes which may arise in connection with this Agreement and each Party irrevocably submits to the jurisdiction of the English Courts and irrevocably waives any objections on the grounds of venue or forum non conveniens or any similar grounds.

Notwithstanding the foregoing, the parties agree that if [Imagina] is/are the plaintiff party, the Spanish Courts shall have exclusive jurisdiction to settle any disputes, at election of [Imagina].

Additionally it is hereby stated that in the event that both Parties reach an agreement the Spanish Courts could have jurisdiction to settle any disputes which may arise in connection with this Agreement."

11

The payment terms are set out in Annex 2. Clauses 1.1 and 1.2 provide that, in consideration for the rights granted under the Agreement, TVV shall pay Imagina:

i) a "signing fee" of €2 million by 31 July 2009;

ii) a "rights fee" of €1 million for 2009;

iii) a rights fee of €4 million for 2010;

iv) a rights fee of €4.5 million for 2011;

v) a rights fee of €5 million for 2012;

vi) a rights fee of €5.5 million for 2013.

12

Clause 1.3.1 provides that, subject to receipt of Imagina's invoice 15 days prior to the relevant date, the rights fees are to be paid "annually in instalment [sic] … [f]or 2010 and all subsequent years, fifty percent (50%) plus the applicable VAT on or before January 31 st, and fifty percent (50%) plus the applicable VAT on or before June 1 st, in each such year".

13

Clause 1.3.2 provides that timely payments of the fees "is of the essence and an express condition precedent to" TVV's right to exercise any of the sub-licensed rights under the Agreement and that late payments shall be subject to interest at a specified rate. Clause 1.2.5 [sic] provides that payments shall be made without set-off or counterclaim.

The Spanish Proceedings

14

By September 2010 TVV had not paid Imagina any of the fees due under the Agreement, amounting to €7 million before VAT and interest.

15

Accordingly Imagina commenced the Spanish Proceedings on 19 September 2010 by means of a Complaint seeking a judgment:

"(A) Declaring the validity of [the Agreement] and, consequently, of the payment obligations assumed by [TVV] by virtue of the same;

(B) Declaring the non-fulfillment of [TVV] as it has not delivered to [Imagina] the amount of the price contractually agreed for the assignment [sic] of the broadcasting rights of [the Championship];

(C) Ordering [TVV] to pay [Imagina] 7,000,000 euros as principal, plus 1,200,000 euros as VAT, 16% of such amount, plus any interest accrued since the due date of each of the invoices issued;

(D) Ordering [TVV] to pay [Imagina] the remaining amounts arising and accruing in the future during these proceedings".

16

On 25 January 2011 TVV submitted its Reply (equivalent to a Defence under English procedure). TVV did not dispute the validity of the Agreement. Nor did it dispute that it had not paid the fees to Imagina. Instead, it contended that it was entitled to withhold payment of those sums as result of a guarantee/set-off arrangement involving Imagina's parent company, Mediaproducción S.L.U.

17

On 16 January 2012 there was a preliminary hearing before the Spanish Court. At the hearing, Imagina asked the Spanish Court to admit into the proceedings the invoices which had fallen due for payment since the commencement of the proceedings, namely those for January 2011, June 2011 and January 2012, and the Spanish Court did so. At some point the trial was scheduled for 25 April 2012.

18

On about 7 February 2012 Imagina terminated its agreement with La Sexta on the ground of non-performance by La Sexta, and instead granted a sub-licence in similar terms to Antena 3 de Television S.A. ("Antena 3") for the 2012 and 2013 seasons. Antena 3 is a privately-owned broadcaster, and the Antena 3 channel is said by TVV to be the most popular TV channel in Spain.

19

On 15 February 2012 TVV requested confirmation from Imagina that it had granted a sub-licence to Antena 3 in place of La Sexta. Imagina confirmed this on 21 February 2012.

20

On 9 March 2012 TVV terminated the Agreement on the ground that Imagina's grant of a sub-licence to Antena 3 in place of La Sexta was a repudiatory breach of the Agreement which TVV accepted ("the Antena 3 Issue"). Imagina disputes the validity of the termination.

21

On 19 April 2012 TVV filed a writ to introduce the Antena 3 Issue into the proceedings as a "new fact" under Article 286 of the Rules of Civil Procedure. TVV argued that, as a result of this new fact, it opposed the validity of the Agreement for the 2012 and 2013 seasons and denied that it owed Imagina any fees for those reasons. As a result, the trial was adjourned.

22

On 2 May 2012 Imagina filed a writ of its own requesting that TVV's writ should not be admitted or should be rejected. Imagina argued that the Antena 3 Issue was irrelevant to the dispute before the Spanish Court. Imagina also argued that the English Courts had exclusive jurisdiction over the Antena 3 Issue. As Imagina pointed out, however, at that time TVV had not commenced any proceedings in England.

23

On 18 May 2012 the Spanish Court issued an interim decision refusing to admit the Antena 3 Issue into the proceedings on the ground that it would "change the action".

24

Under Spanish procedural rules, an interim decision of that kind can be appealed to the same court. On 30 May 2012 TVV appealed against the decision dated 18 May 2012. In its appeal TVV emphasised that it was not asking the Spanish Court to determine the Antena 3 Issue, but only to refrain from ruling on the validity of the Agreement for the 2012 and 2013 seasons. Furthermore, TVV announced that it intended to commence proceedings in England for the determination of the Antena 3 Issue.

25

On 4 June 2012 Imagina issued an invoice in the sum of €2.5 million plus VAT, being the second tranche of the rights fee for 2012. TVV returned this unpaid.

26

On 15 June 2012 Imagina responded to TVV's appeal,...

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