INDIA BUSINESS WORLD - JANUARY 16^th - JANUARY 31^st - 2008

BOMBAY HIGH COURT RULES NEGATIVE COVENANT IN YUVRAJ-PERCEPT CONTRACT UNENFORCEABLE

Cricketer Yuvraj Singh has got a reprieve from the Bombay High Court as it dismissed a plea filed by the Percept Talent Management Pvt Ltd seeking to restrain the all-rounder from signing any contract with any other company regarding advertisement rights.

Percept had moved the High Court after Yuvraj opted not to respond to its offers to renew the contract, which ended in October last year and was on the verge of signing contract with Globosports India. Though Percept has initiated arbitration proceedings against Yuvraj, it had sought interim relief by way of restraining orders from the High Court. But, when a single judge bench dismissed its plea, Percept had moved a division bench against the order.

The divison bench, comprising Chief Justice Swatantra Kumar and Justice J P Deodhar, today confirmed the order of the single judge and dismissed the appeal.

It was contended by Percept that persuant to a clause incorporated in the contract agreement with Yuvraj, it had the right of first choice and the cricketer could not negotiate or sign a contract with any other company regarding media, advertisements and related activities.

But, while approving single judge's order, the division bench today observed that the negative covenant in the Contract Agreement was not enforceable beyond term of the contract and therefore granting interim relief to the company was out of question.