Mumbai: India’s largest digital cinema distribution network and in-cinema advertising platform UFO Moviez has dragged 20 single screen theatre owners and operators to the Bombay High Court for allegedly breaching contract and joining rival distributors.
The traditional cinema operators, however, argued that the Mumbai-headquartered firm is indulging in pressure tactics by forcing one sided agreements and lawsuits, which UFO Moviez has denied.
The company has filed 20 such cases in the Bombay High Court, asking the respondents to deposit over Rs 55 lakh towards compensation for the digital cinema equipment and another Rs 55 lakh towards damages at 18% interest. “20 applications seeking various injunctive reliefs have been filed against various theatre owners seeking enforcement of our various rights under legally binding contracts,” said Rajesh Mishra, CEO – India operations at UFO Moviez, adding the company is seeking enforcement of its various rights under “legally binding” contracts.
The dispute started when a clutch of single-screen owners tried to terminate the 10-year equipment lease agreements (ELA) that they had signed with UFO Moviez in order to go with another player.
“The petitioners learnt that one of its competitors is approaching and luring its customers, including the respondent, and instigating to wrongfully terminate the ELA and advertising agreement on false and flimsy pretext,” reads UFO Moviez’ petition.
The Single Screen owners, who has received the court notice blame that the agreements that UFO had forced two years back were heavily lopsided and UFO’s services are proving to be very costly for single screen owners and the company is also trying to scare them with lawsuits using their dominant position as the theatre owners wanted to end the contract.
They also state that there were no options earlier and Now that they are getting similar service from another party, UFO is not letting them to terminate the contract. The company has engaged law firm ALMT Legal to advise on the case. It seems Most of the cases are from Karnataka, while some are from Gujarat and Tamil Nadu.
However, Mr Rajesh Mishra denied that UFO Moviez is indulging in any kind of pressure tactics. “UFO Moviez has engagements with 5,000 theatre screens across India through legally binding contracts that have been mutually agreed and accepted by both parties.”