The Bombay High Court has restrained DUNE Collective LLP from creating third-party rights in the claimed 40% intellectual property rights of the feature film SNAP, pending commencement of arbitral proceedings and subject to orders of the arbitral tribunal.
Justice Amit Borkar partly allowed a petition filed by VVAA Films Private Limited under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim protection in a dispute arising from a co-production agreement dated April 3, 2026.
Under the agreement, VVAA Films had agreed to invest up to ₹15 crore towards the film’s production and publicity in exchange for 40% ownership of its intellectual property rights and a 40% share in net profits. The petitioner alleged that DUNE Collective failed to provide the required financial disclosures and make the escrow account operational, while demanding further funds and threatening to terminate the agreement.
The respondent, on the other hand, contended that VVAA Films had failed to fulfil its funding obligations and that the film’s production was facing difficulties due to outstanding payments to vendors.
The Court observed that the agreement prescribed a 30-day period to remedy an alleged breach before termination. However, the termination communication dated June 29, 2026, demanded ₹6.5 crore within 36 hours and threatened immediate termination.
The Court clarified that the final questions concerning the parties’ contractual rights, the validity of termination and their respective entitlements would be decided by the arbitral tribunal. It declined to grant a blanket direction compelling performance of the entire agreement or restraining the respondent from acting upon the termination at this stage.
Under the interim directions, DUNE Collective must furnish, within four weeks, complete details and supporting documents concerning the utilisation of the funds received from VVAA Films, including bank statements, invoices and vouchers, along with the financial records required under the agreement. VVAA Films was directed to take steps to commence arbitration within 30 days.
The Court emphasised that the interim protection was intended to preserve the subject matter of the dispute without granting either party an irreversible advantage before arbitration. The petition was accordingly disposed of, with all observations being prima facie and the merits left open for determination by the arbitral tribunal.
