IMAX Corporation has announced that a Panel of the International Court of Arbitration of the International Chamber of Commerce found unanimously in favor of IMAX in an arbitration against E-City Entertainment (I) PVT Limited (“E-City”), and awarded Imax $9.4 million, plus interest and costs, which IMAX believes will increase the award to in excess of $11 million in the aggregate.
The arbitration, which took place in London and included three separate witness hearings and extensive legal briefing, involved an agreement under which IMAX awarded E-City rights to develop a minimum of six IMAX® theatres in India. E-City subsequently claimed that the agreement was a non-binding term sheet, that the amount of damages that IMAX was seeking for lost profits was excessive and that IMAX had failed to mitigate its damages. The Panel found that the agreement was fully enforceable, that E-City had breached its obligations under that agreement and awarded IMAX all of the lost profits that it sought under the agreement.
E-City is affiliated with India’s Essel Group, a conglomerate best known for its worldwide Zee TV television network and headed by the well-known Indian industrialist Subhash Chandra. E-City operates movie theatres as part of entertainment centers throughout India under the names “Funcinemas” or “Fun-Republic.”
The parties’ agreement provided for bringing ICC arbitration of all disputes. The Panel was composed of three distinguished practicioners: Arthur Marriott, Q.C. of the London office of the LeBeouf Lamb law firm, Professor Errol Mendes of the University of Ottowa and M.L. Bhakta, a prominent solicitor from Mumbai. The Panel’s Award was unanimous in favor of IMAX. If E-City does not voluntarily pay the Award, IMAX intends to commence enforcement proceedings against E-City’s assets.
IMAX was represented in the arbitration by Jonathan Cooperman of Kelley Drye & Warren LLP.
About IMAX Corporation
IMAX Corporation is one of the world’s leading digital entertainment and technology companies. The worldwide IMAX network is among the most important and successful theatrical distribution platforms for major event Hollywood films around the globe, with IMAX theatres delivering the world’s best cinematic presentations using proprietary IMAX, IMAX® 3D, and IMAX DMR® technology. IMAX DMR is the Company’s groundbreaking digital remastering technology that allows it to digitally transform virtually any conventional motion picture into the unparalleled image and sound quality of The IMAX Experience®. IMAX’s renowned projectors and new digital systems display crystal-clear images on the world’s biggest screens. The digital system being developed by IMAX is configured for an IMAX MPX-style auditorium, which is designed specifically to enable multiplex operators to more cost effectively enter into the IMAX theatre business. The IMAX brand is recognized throughout the world for extraordinary and immersive entertainment experiences for consumers. As of September 30, 2007, there were 296 IMAX theatres operating in 40 countries.