Every so often a routine commercial dispute forces a court to say something more general than the case strictly requires, and the general statement ends up mattering more than the dispute itself. The Madras High Court’s recent order in Eros Technologies Digital FZE v. Ayngaran International Media Private Limited & Ors. is that kind of case. On its face, it is a fight between a film-rights assignee and the group of companies from which the rights originally flowed, over who gets to exploit a set of cinematograph films on social media. But buried inside that fight is a question that Indian arbitration law has never fully settled: when a copyright owner sues for infringement and asks for the civil remedies that Section 55 of the Copyright Act gives it, can the defendant force that dispute out of court and into arbitration merely because somewhere upstream, in the chain of title, there was an arbitration clause?
The reflexive answer for a long time was no. Copyright is a creature of statute. Infringement is defined by statute. The remedies, injunctions, damages, accounts of profits, are conferred by statute. And Indian courts have historically treated statutory rights with a certain wariness when arbitration is proposed as the forum, on the theory that a right created by public law, enforceable against the world, is not the kind of thing two private parties can simply agree to resolve between themselves. That wariness is not irrational. But it has also never applied with the same force to every statutory right, and copyright, commercialised, licensed, assigned, and sub-licensed as routinely as it is, sits somewhat awkwardly in the “purely statutory, therefore non-arbitrable” bucket. The Eros order adds another data point to a line of authority, starting with the Bombay High Court’s 2016 decision in Eros International Media Ltd. v. Telemax Links India Pvt. Ltd. (a different Eros entity, doing much the same kind of coincidental damage to case-name searchability that copyright disputes seem prone to), that says the bucket was never as watertight as it looked.
This piece works through the Madras High Court’s reasoning, situates it against the rights in rem/rights in personam framework that Indian courts use to sort arbitrable disputes from non-arbitrable ones, and asks what the decision contributes. That contribution, as will become clear, is narrower and more useful than a blanket pronouncement that “copyright disputes are arbitrable.”
The Eros Technologies Dispute
The facts are not complicated, though the corporate structure behind them takes a moment to untangle. Ayngaran International Limited had, at some point, assigned rights in a set of films on behalf of its group companies. Those rights then passed through a chain of successive assignments, the kind of layered transfer that is common in the film industry, where rights get bundled, resold, and re-licensed across multiple jurisdictions and platforms, before eventually landing with Eros Technologies Digital FZE. The assignment at the head of this chain, executed on 23 March 2018, contained an arbitration clause: Clause 18 of the Deed of Assignment.
Eros’s grievance was that Ayngaran International Media Private Limited, Ayngaran International Films Private Limited, and their director, Kumarasamy Karunamoorthy, had started exploiting the very rights Eros claimed to hold uploading, streaming, and monetising the films on social media platforms, in a way that undercut the commercial value of what Eros had paid for. Eros filed a commercial suit and sought an interim injunction to stop the exploitation.
That is the entire dispute in outline. What makes it interesting is not the underlying commercial disagreement, which is a standard assignor-versus-assignee-versus-sub-licensee tangle, but what happened next. The defendants did not contest the suit on the merits. Instead, they asked the court to get out of the way and send the matter to arbitration.
The Arbitration Objection
Karunamoorthy’s application invoked Clause 18 of the 2018 Deed. Eros resisted on three separate grounds, each of which tracks a standard objection raised whenever a party tries to escape a court proceeding by pointing to someone else’s arbitration clause.
First, Eros said it was not a party to the arbitration agreement. Neither, for that matter, was Karunamoorthy, who was a director of the Ayngaran companies rather than a signatory to the 2018 Deed in his personal capacity. If neither the plaintiff nor one of the principal respondents had signed the arbitration clause, the argument ran, there was no consensual basis to compel arbitration between them.
Second, Eros argued that its claim was not, properly understood, a contractual dispute at all. It framed the suit as a straightforward copyright infringement action under Section 55 of the Copyright Act, a statutory civil remedy that exists independently of any contract, and one that Eros said was inherently non-arbitrable because it vindicates a right good against the world, not merely against the specific defendants named in the suit.
Third, Eros pointed to the multiplicity of parties. Google LLC was also on record, evidently because some of the alleged infringement involved content hosted or distributed through Google’s platforms, and Eros argued that a dispute involving parties who were strangers to the arbitration clause could not be neatly carved up and sent to arbitration while the rest stayed in court. Splitting the dispute that way, Eros suggested, risked parallel proceedings and inconsistent outcomes.
The Ayngaran companies and Karunamoorthy pushed back on the first and second points directly. Their position was that Eros’s own claim to the copyright existed only because of, and only by virtue of, the chain of assignments that began with the 2018 Deed. One cannot derive title from an agreement and then disown the clause in that same agreement that governs how disputes arising from it are to be resolved. As for the statutory-remedy argument, they contended that Section 55 providing a civil remedy did not mean that remedy had to be pursued in a civil court; arbitration, after all, is simply an alternative mode of resolving civil disputes, and nothing in the Copyright Act says otherwise.
What did the Madras High Court Hold?
Justice K. Kumaresh Babu accepted the defendants’ position, and the reasoning is worth setting out with some precision because the order does real work in a compressed space.
On the statutory-remedy point, the court’s formulation was direct: Section 55 gives a civil remedy for infringement, and a civil remedy can be pursued through arbitration if the parties have agreed to that mode of resolution, because arbitration is simply a form of alternative dispute resolution operating between the parties. The existence of a statutory cause of action, in other words, does not by itself say anything about the forum in which that cause of action must be litigated. The statute creates the right and the remedy; it does not mandate a court as the exclusive venue for vindicating either, absent express language to that effect, and Section 55 contains none.
On the privity point, whether Eros and Karunamoorthy, neither of whom signed the 2018 Deed, could be bound by its arbitration clause, the court reasoned through the chain of title. Eros’s claim to the copyrights existed only because it was a successive assignee under an unbroken chain running back to the original assignment made by Ayngaran International Limited on behalf of its group companies. The court held that a party who derives its substantive right from an assignment cannot simultaneously repudiate the dispute-resolution mechanism embedded in that same instrument. Put more sharply: a party cannot claim the benefit of the assignment while disclaiming the burden that travels with it.
There is a second, more structural piece of reasoning here that deserves attention. The court observed that it found no prima facie basis to conclude the arbitration agreement was null and void, inoperative, or incapable of being performed, the statutory grounds under which a court can refuse to refer parties to arbitration. It explained why in a way that is almost self-referential: if the underlying assignment were void, then Eros’s own claim to the copyright, which exists only because of that same assignment, would collapse along with it. Eros could not have it both ways, asserting the validity of the assignment to establish standing to sue while denying the validity of the arbitration clause sitting inside the very same document. Similarly, if the agreement were incapable of being performed, Eros’s infringement claim itself would have no foundation, because the cause of action depended entirely on rights conferred by that agreement.
Having found the objections did not survive scrutiny, the court held that the parties could only be referred to arbitration under Section 45 of the Arbitration and Conciliation Act, 1996, the provision applicable to arbitration agreements governed by the New York Convention framework, engaged here because of the foreign element introduced by Eros’s FZE structure. It allowed the application, dismissed Eros’s interim injunction plea, and directed the registry to strike off and return the plaint. No costs were awarded.
The ADR Question: Can Statutory Remedies Be Arbitrated?
Step back from the facts and the real question the case raises is a familiar one dressed in a new context: does a right being statutory automatically make it non-arbitrable?
The short answer, as Indian courts have worked it out over roughly the last decade and a half, is no, but the longer answer requires distinguishing between two very different senses in which a right can be “statutory.” Some statutory schemes create rights and remedies that are inherently public in character: they involve adjudicatory functions specially entrusted to particular fora (tenancy protections, certain insolvency matters, criminal or quasi-criminal consequences, matters affecting third parties or the public at large who cannot be bound by a private arbitration agreement). The Supreme Court’s decision in Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd. remains the reference point here, laying out the well-known categories of disputes considered non-arbitrable (matters involving rights in rem, disputes requiring centralised adjudication, and so on) while making clear that a right existing under statute is not, by that fact alone, disqualified from arbitration.
Copyright does not fit neatly into the first category. Yes, copyright is created and defined by the Copyright Act. Yes, the remedies for infringement, injunction, damages, delivery-up, accounts of profits, are statutory. But the exercise of those rights, and disputes about who holds them, who has been assigned what, and who is entitled to exploit a particular work, are overwhelmingly disputes between identified private parties about their competing claims. Nothing about resolving whether a specific defendant infringed a specific plaintiff’s assigned rights, and if so, what damages flow, requires the coercive or public machinery of a court in the way that, say, a winding-up petition or a matrimonial dispute does.
The Madras High Court’s holding sits comfortably within this framework rather than breaking new ground on it. What it actually decided, and this distinction matters because it is easy to overstate, is that a Section 55 claim, when it arises out of a contractual relationship (here, a chain of assignments) that itself contains an arbitration clause, does not lose its arbitrable character merely because Section 55 happens to be the statutory hook for the civil remedy sought. The infringement claim was not free-floating; it was inextricably tied to the assignment chain, and the dispute was, at bottom, about the scope and continuing validity of rights conferred under that chain. That is a meaningfully narrower proposition than “copyright disputes are arbitrable,” and the narrowness is a feature, not an oversight.
IP Rights: Rights in Rem vs Rights in Personam
The rights in rem/rights in personam distinction does a lot of quiet work in this area, and it is worth being precise about what it separates.
A right in rem is good against the world. It does not depend on any relationship with a particular person and can be asserted against anyone who interferes with it. The grant of a copyright itself, or the question of whether a work is validly copyrightable, or whether registration (in trademark or patent contexts) should be cancelled, involves the state’s machinery in a way that arguably cannot be delegated to a private tribunal, because the outcome affects parties who never agreed to arbitrate and never will.
A right in personam, by contrast, is a right enforceable against a specific, identified person, usually because of some relationship or transaction between them. An infringement claim against a named defendant is, in this sense, always structurally in personam. It does not purport to bind the world, only the parties before the tribunal. The Bombay High Court captured this distinction precisely in Eros International v. Telemax, holding that while a copyright holder’s entitlement to sue is rooted in a right that is, in a loose sense, in rem (the underlying ownership), the actual cause of action for infringement or passing off, asserted against one identified defendant, is a subordinate right in personam, and an order in such a suit binds only the parties to it, not the world.
This is precisely the analytical move that lets courts arbitrate patent licensing and infringement disputes while refusing to arbitrate patent validity challenges, a distinction the Madras High Court itself drew in the separate Lifestyle Equities v. QD Seatoman Designs line of reasoning: validity is erga omnes and belongs in a forum with the institutional competence and public accountability to cancel or uphold a grant; infringement between two named parties, arising out of an assignment or licence between them, does not carry that same public dimension.
The Eros Technologies dispute is a clean illustration of the in-personam category. Nobody was asking the arbitral tribunal to determine whether the underlying copyright subsisted in some abstract, world-binding sense, or to cancel a registration, or to adjudicate rights against unknown third parties. The question was whether these specific parties, bound (on the court’s finding) by a specific chain of assignments, had infringed each other’s specific contractual entitlements. That is about as in personam as an IP dispute gets, and it is precisely why the court felt comfortable sending it to arbitration without treading on the broader, more contested question of whether copyright disputes as a category are arbitrable.
Assignment and the Binding Effect of Arbitration Clauses
If there is one part of this order that will get cited well beyond the narrow context of film rights, it is the reasoning on successive assignees and arbitration clauses.
The “group of companies” doctrine and various non-signatory theories (agency, alter ego, composite transactions) have been used before to bind non-signatories to arbitration clauses, and Indian courts, particularly after the Supreme Court’s decision in Cox and Kings Ltd. v. SAP India Pvt. Ltd., which entrenched the group of companies doctrine as part of Indian arbitration jurisprudence, have grown reasonably comfortable applying them. But the Eros order rests on a slightly different and, in some ways, more intuitive foundation: successive assignment. Eros did not sign the 2018 Deed. It became a party to the chain of title later, as one link among several. The court’s reasoning was essentially that an assignee steps into the shoes of the assignor with respect to the instrument from which the assigned right flows, including, absent contrary indication, the dispute-resolution clause governing disputes arising out of that instrument.
This has an obvious commercial logic. Rights in films, music catalogues, software, and other IP assets are routinely assigned and re-assigned, often multiple times, often across jurisdictions, and often without every subsequent assignee separately negotiating a fresh arbitration agreement with every other stakeholder in the chain. If each successive assignee could simply disclaim the original arbitration clause on privity grounds while still asserting the substantive rights that clause was meant to govern, arbitration clauses in IP assignment agreements would offer very little practical protection. A defendant could always find some downstream party who never personally signed anything to route the dispute back into litigation.
At the same time, the court’s own logic contains the seeds of its limits. The binding effect flowed specifically from the fact that Eros’s cause of action was derivative of the assigned rights; its claim to sue for infringement existed only because of the chain of title running through the arbitration clause. Had Eros been asserting some independent right unconnected to that chain, say, an entirely separate act of infringement unrelated to the assigned works, or a claim against a genuine stranger to the assignment history, the “benefit without the burden” reasoning would have far less purchase. The holding binds successive assignees to arbitration clauses governing the very rights they are asserting; it does not stand for the proposition that an arbitration clause in one agreement automatically follows an asset through every subsequent transaction regardless of what the dispute is about.
Limits of the Judgment
It would be a mistake, and an easy one to make given how the order gets summarised in headlines, to read this as a general holding that copyright infringement disputes are arbitrable. The order is considerably narrower than that, and several qualifications are worth spelling out.
First, this was a Section 45 reference at the pre-arbitration stage, not a merits determination by an arbitral tribunal or a considered ruling after full argument on non-arbitrability as a doctrinal matter. The court’s job at that stage is limited: to assess, prima facie, whether the arbitration agreement exists, covers the dispute, and is not null and void, inoperative, or incapable of being performed. That is a lower threshold than a final ruling on arbitrability after full merits argument, and the reasoning should be read with that procedural posture in mind.
Second, the dispute was thoroughly contractual in its origin even though it was pleaded as a statutory infringement claim. Every party’s claim to the underlying rights traced back to the same 2018 Deed of Assignment. This is not a case where a copyright owner with an independently established, undisputed title sued a genuine stranger for straightforward piracy and got told to go arbitrate. It is a case where the very existence and scope of the plaintiff’s rights were themselves contested and derived entirely from the instrument containing the arbitration clause. Strip away that overlap and the “benefit without the burden” reasoning simply has nothing to attach to.
Third, the order does not touch, because it did not need to, the harder question of whether a dispute about the validity or subsistence of copyright itself, as opposed to a dispute about contractual entitlement to exploit an admittedly valid copyright, could be arbitrated. That question remains as unsettled after this order as before it, and the Madras High Court’s own acknowledgment, drawing on the patent validity/patent infringement distinction, suggests the court was conscious of not overreaching into that territory.
Fourth, Google LLC’s presence on record is a reminder that not every stakeholder in a copyright dispute is bound by every arbitration clause floating around in the chain of title, and the order does not purport to resolve what happens to genuinely non-privy third parties caught up in the same broader dispute, an issue that, in a differently postured case, could well produce a different, more cautious outcome.
Implications for Drafting IP Agreements
For practitioners drafting or reviewing assignment and licensing agreements involving copyright, or, by extension, other forms of IP that are routinely commercialised through layered transactions, this order is a useful prompt to revisit some drafting habits.
An arbitration clause that is meant to travel with the asset through successive assignments should say so expressly, rather than relying on courts to infer binding effect from the general logic of derivative title. A clause providing that “this arbitration agreement shall bind and inure to the benefit of the parties, their successors, and permitted assignees” removes the interpretive work the Madras High Court had to do here and forecloses the privity objection at the outset.
Equally, parties who do not want disputes about statutory infringement claims swept into arbitration, because, for instance, they anticipate needing urgent interim relief that a court can grant more readily than an arbitral tribunal, or because they want to preserve the option of proceeding against unknown infringers via John Doe orders, which arbitration cannot accommodate, should consider carving out infringement claims, or at least claims against third parties, from the scope of the arbitration clause explicitly. Silence invites exactly the kind of interpretive dispute litigated here.
The multi-party dimension deserves separate attention. Where an IP asset is likely to be exploited or sub-licensed by multiple downstream parties, drafters should think in advance about whether disputes involving non-signatory sub-licensees, platforms, or intermediaries are meant to be consolidated with arbitration proceedings against the primary counterparty or kept entirely separate. Leaving these unaddressed risks the fragmented-proceedings problem Eros raised unsuccessfully here, and there is no guarantee the next court will resolve that fragmentation the same way.
Finally, given that interim injunctive relief was squarely in play in this dispute and was ultimately denied to Eros once the matter was referred to arbitration, parties should turn their minds to interim-measure provisions: whether the clause preserves a right to approach a court under Section 9 of the Arbitration and Conciliation Act (or, for Section 45 matters, the equivalent Convention-compatible interim relief route) pending constitution of the tribunal, and how quickly emergency relief can realistically be obtained through the chosen arbitral institution if urgency is a genuine commercial concern for the kind of asset involved.
Conclusion
The Eros Technologies order does not settle the arbitrability of copyright disputes as a general proposition, and it would be doing the judgment a disservice to treat it as though it had. What it does is something more useful and more precisely bounded: it confirms that a Section 55 civil remedy does not become non-arbitrable merely because it is statutory, at least where the dispute is genuinely rooted in a contractual chain of assignment that itself contains an arbitration clause; and it holds, with reasoning that has broader application well beyond film rights, that a successive assignee cannot claim the benefit of an assignment while disowning the dispute-resolution mechanism written into the instrument that created that benefit.
Read narrowly, which is how it should be read, the decision strengthens arbitration as a viable and enforceable mechanism for resolving disputes that arise out of contractual IP relationships: assignments, licences, distribution arrangements, and the disputes that inevitably follow when those relationships sour. Read too broadly, it risks being cited for a proposition it does not actually stand for, namely that copyright infringement, as such, is always arbitrable regardless of context. The more interesting and still-open questions, validity challenges, disputes against genuine strangers with no contractual nexus, the treatment of non-signatory intermediaries and platforms, remain exactly where they were before this order: unresolved, and likely to stay that way until a case squarely presents them for decision.