1ST NATIONAL MEDIATION COMPETITION by THE LEGAL LOCK

PROPOSITION

Crickpro Pvt. Ltd. is an Indian company registered under the Companies Act, 1956 and based
out of Hyderabad, having a registered Trademark for its name and logo. The company is
engaged in the production and sale of cricket kits for various forms of cricketing competitions
in the city, including inter-school cricketing tournaments, club cricket leagues, etc. and enjoys
a decent market share in Hyderabad (approx. 30%). The company is owned by Michael Scott,
a former cricketer himself, who represented the Erstwhile State of Andhra Pradesh for over six
years. CrickPro was incorporated (and its trademark registered) in the year 2011, following
India’s victory in the World Cup.

The Indian Cricketing Tournament (“ICT”) is a nationwide cricketing competition which is

conducted to scout for domestic talent and provide them a chance at national and international
level cricketing tournaments. Organized since 2015, the ICT became one of the country’s
biggest sporting events in the course of a decade. By 2020, ICT matches saw full stadia and an
increasing frenzy among fans of the eight participating franchises.

Realizing that the ICT is a massive opportunity to expand his brand at a national level, Michael
Scott attempted to become the official cricket equipment sponsor (“CES”) for any of the
participating franchises. However, he did not get the opportunity to do so, as all the franchises
were well set with their respective cricket equipment sponsors.

On 5th May, 2021, Michael met with Dwight Schrute, a close friend of his, who had gone abroad
for a couple of years. Dwight is the owner of an advertising agency ‘Express Ads Pvt. Ltd.’ and
has seen great success. The two friends caught up on the past two years and in the course of
the conversation, Michael mentioned about his plan to expand CrickPro and get a wider market.

Dwight suggested that Michael use his advertising agency’s services and start promoting
CrickPro in States other than Telangana, so that the brand gets noted by cricketing organizers
across the country. However, Michael dismissed the idea stating that he is a regional
manufacturer and lacks the financial prowess to pursue such a big advertising campaign. He
further stated that an ICT contract would provide him with enough reach in the market to think
about such a step. Dwight acknowledged the fact and the conversation ended there.

Luckily for Michael, in June, 2023, “Hyderabad Heroes”, the franchise representing Hyderabad
in the ICT decided to change their CES owing to business and other concerns. Hyderabad
Heroes being a new franchise, the costs involved in a contract with them would be relatively
lesser in comparison to other teams, which Michael saw as a major advantage.

Michael was contacted by an excited Dwight, who asked him to go for the opportunity,
especially since it was the regional franchise and he enjoyed regional popularity. Dwight also
stated that to widen his popularity, he can engage Express Ads’ services so that CrickPro has
an upper hand over competitors. He even promises to reduce the agency’s charges and further
off-set it by the royalties which he would have to pay.

Despite being initially reluctant, Michael agreed to the advertising campaign. In the process,
both the companies entered into a Trademark License Agreement, which authorized Dwight to
use the Trademark of CrickPro for advertising purposes. The agreement is drafted by Express
Ad’s in-house counsel. The relevant clauses are as follows:

3.1. Permitted and Prohibited Uses. The Licensee will use the Marks only while the
License is in effect, only in the territory of Hyderabad, and in compliance with all
applicable laws and regulations.

Further, the Licensee will use the Marks only in accordance with the policies,
specifications, directions and standards of the Licensor. The Licensor agrees that the
Licensee has the absolute authority to use the Marks specifically for advertising and
brand-expansion purposes, in a manner he deems fit.

The Licensor will notify the Licensee of any changes or alterations made to any of the
Marks from time to time during the term of this Agreement, and within thirty (30) days
of receipt of such notice, or as soon as reasonably practical, whichever is earlier, the
Licensee will ensure that all of its usage of any Marks so changed or altered complies
with any such notice given.

4.1. Royalties to be paid monthly. The Licensee will pay to the Licensor, a fixed
amount of Rs. 10,000/- (Rupees Ten Thousand only) per month, as royalties for using
the Mark. In case of default to pay the Royalties, the Licensee is liable to pay an interest
at 6% per month, till the default payment is made.

7.2. Dispute Resolution Mechanism. The parties agree that in case of a dispute arising
relating to this Agreement, the same would be first referred to an organization
facilitating arbitration or mediation, located in Hyderabad. The parties are free to
determine the relevant forum.
Michael apprehended that the words “absolute authority” in clause 3.1. puts him at a
disadvantage, but keeps quiet about it, due to his trust in Dwight as well as the urgency of the
situation. Both the parties signed the agreement on 25th June, 2023.

True to what Dwight said, the advertising campaign invoked a favorable response from the
owners of “Hyderabad Heroes”, who contacted Michael on 26th July, 2023 and expressed their
desire to meet him in the second week of August, 2023 and discuss the terms of their agreement.
Since Dwight played a major role in bringing about this opportunity, Michael decided to take
him along to the meeting and conveys the news to him. However, Dwight declined and stated
that he wanted to meet Michael to discuss something important. Sensing urgency in Dwight’s
tone, Michael agreed to meet him immediately.

When they met, Dwight reluctantly disclosed that Michael cannot enter into a contract with
Hyderabad Heroes because just two days ago, CrickPro had agreed to be the CES for Chennai
Champions, another franchise in the tournament, which has been participating since the very
first edition and has a massive fanbase. Pursuant to the agreement, Dwight had paid an advance
of Rs. 10,000/-, which he recorded in his books as expenses to be borne by CrickPro.

Needless to say, a CES contract with Chennai Champions would be much costlier than the one
with Hyderabad Heroes. Dwight explained that although there would be higher costs, they can
be recovered by capitalizing on the substantial reach the company will have if it is the CES for
Chennai Champions.

Michael however, was enraged that Dwight, who was just a Trademark Licensee, would enter
into a contract without his consent, even more so because the contract is not beneficial from
Michael’s point of view. When he raised this point, Dwight pointed out that he did not have
time to inform Michael and would have anyways informed him after all the formalities were
completed, which was done just before the day they met. He further stated that anyways, he
had the absolute authority to do anything to expand the brand and that the contract with Chennai
Champions would be covered under this authority. Michael on the other hand refused to yield
to this contention and firmly stated that Dwight could not have entered into the contract without
notifying him. Dwight on the other hand, argued that he did not need Michael’s consent and
that his actions were more beneficial than Michael’s contract with Hyderabad Heroes. In the
same vein, Dwight also stated that his payment of Rs. 10,000/- to the franchise was justified.

Michael was devastated as he realized that the contract would Chennai Champions, if not
revoked immediately, would cause him to lose an opportunity with Hyderabad Heroes. Adding
to his woes, he would also suffer reputational damage, which would be adverse for CrickPro.
Sensing an impasse in their relationship and also realizing the urgency of the situation, Michael
decided to invoke the mediation clause in the contract and invited Dwight to attend a mediation
session conducted by the Mediation Centre annexed to the High Court of Telangana. Dwight
agreed and consequently, the first session got scheduled on 17th September, 2023.

Disclaimer

The Mediation Problem is a work of fiction. Names, characters, places and incidents are either
products of the authors’ imagination or used fictitiously. Any resemblance to actual events or
locales or persons, living or dead, is entirely coincidental. Any resemblance to actual firms,
institutions, organizations or any other entities is entirely coincidental and in exercise of the
authors’ attempt to further academic research.