Standard Group ordered to pay millions over unpaid KTN licence fees for 2 shows

The Standard Group PLC has been ordered to pay Ivory Media Limited Sh13,525,320 after a Milimani Commercial Magistrate’s Court found that the KTN parent company breached agreements to broadcast two television programmes, Junior and My Two Wives.

The court also awarded interest on the principal sum at court rates from the date the suit was filed until payment in full, as well as the costs of the case.

Delivered by Senior Principal Magistrate A. Nyoike, the judgment, brought to a close a dispute over unpaid licence fees for the two programmes, which Ivory Media said had been delivered and broadcast by KTN.

Ivory Media had sued Standard Group seeking Sh13,525,320 in outstanding licence fees, general damages for breach of contract and costs of the suit.

According to the judgment, the parties entered into a Programme Licence Agreement on October 10, 2020, for the television show Junior and another agreement on January 1, 2021, for My Two Wives.

Under the agreements, Ivory Media was required to deliver four programmes every month, together with materials including taglines, synopses, titles and high-resolution promotional pictures.

Standard Group was to pay Sh170,000 inclusive of VAT per episode for Junior and Sh168,000 plus VAT per episode for My Two Wives.

The licence fees were payable quarterly within 90 days of receipt of invoices.

The agreement provided for Junior to run for 52 weeks, while My Two Wives was scheduled to run for 26 weeks.

Ivory Media told the court that it fulfilled its obligations and that the programmes were aired by the broadcaster, but Standard Group subsequently failed to settle the agreed licence fees.

The production company said it repeatedly engaged the broadcaster between 2021 and 2022 over the delayed payments, with the parties negotiating several payment plans to clear the outstanding amount.

It eventually went to court after the balance remained unpaid.

In its defence, Standard Group denied the claim and argued that it was a “stranger” to the Programme Licence Agreements.

The company denied the existence of valid agreements between itself and Ivory Media for either Junior or My Two Wives.

The court, however, rejected the defence after examining the agreements and subsequent correspondence between the parties.

Ivory Media produced copies of the two agreements bearing the company stamps of both Ivory Media and The Standard Group PLC.

The documents were executed by Philippe Bresson, identified as Director of Ivory Media, a representative identified in the agreements as Group CEO of The Standard Group PLC.

Once documents bearing the company's seal and the signature of a person holding themselves out as the Group CEO had been presented, a bare denial was insufficient to challenge their validity, according to the court.

A key part of the case was correspondence generated by Standard Group's own finance and accounts departments.

According to the judgment, emails exchanged between July 2021 and May 2022 repeatedly acknowledged an outstanding balance owed to Ivory Media.

The correspondence included proposed payment plans and records of part-payments made by Standard Group.

One of the payments cited by the court was Sh897,439.51 remitted on July 23, 2021, alongside further electronic funds transfer payments reflected in the parties' statement of account.

The court said it was difficult to reconcile those actions with Standard Group's position that it was a stranger to the agreements.

The court further relied on provisions of the Evidence Act concerning admissions, finding that the conduct and correspondence from Standard Group's finance department constituted evidence of both the contractual relationship and the outstanding debt.

Ivory Media also presented a detailed statement of account setting out the invoices issued for individual episodes and payments received from Standard Group.

The statement arrived at a closing balance of Sh13,525,320.

The court found additional support for the figure in an internal reconciliation prepared by Standard Group's Legal Officer.

In an email dated July 24, 2023, the company's records placed its balance at Sh10,394,909.84, while an “Expected Balance” was calculated at Sh13,525,319.84 and the supplier's statement of account showed Sh13,525,320.

The court found that the production company had therefore proved the amount claimed.

Ivory Media had also sought general damages, arguing that the delayed payments had caused financial losses, affected its ability to pay suppliers and damaged its relationship with cast members.

The court declined to award general damages.

It held that general damages are not ordinarily awarded for breach of contract and found that the evidence did not establish circumstances falling within the narrow exceptions to that principle.

Instead, the court found that interest on the unpaid principal was sufficient compensation for the delay.