England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		28th May 2004

Mr Justice Lindsay:

Introduction

1. The Defendant ("Celador") which appears by Mr Stephen Bate, owns world-wide rights to the very successful television gameshow, "Who wants to be a Millionaire?" ("WWTBAM"). In late 2000 the Claimant ("Arief"), a Californian company under the control of Malaysian family shareholders, spotted the great potential of WWTBAM for showing on Indonesian television. Arief (which appears by Mr Michael Kay Q.C. and Mr David Head) quickly did an outline deal with ECM Production Limited ("ECM"), then the distributor for Celador, to acquire rights to WWTBAM in Indonesia. Heads of Agreement with ECM were agreed in November 2000 and a more comprehensive contract was made in April 2001. Only a few days later, on the 30^th April 2001, Celador regained from ECM control over licensing of the show.
2. In Indonesia Arief invested at great expense in the necessary hardware, including the building of the very specific studio-set which the show required, and it made broadcasting, production, premium-line telephone, sponsorship and advertising arrangements. It acquired the necessary special computers and software. The recording of the first series of the show in Indonesia (regulated by the contract between ECM and Arief) began in late July 2001. The initial arrangements for the show in Indonesia had included that it would be broadcast by the Indonesian State television enterprise, TVRI, and shot in a TVRI studio but another but independent Indonesian television production company, RCTI, became involved as broadcaster, although recording at first took place in TVRI's studio. The show proved a resounding success.
3. On the 28^th March 2002 Celador by a formal Second Series Agreement licensed Arief for a second series, giving Arief a right to produce a minimum of a further 30 and a maximum of a further 52 episodes. A crucial feature of the Second Series Agreement (which I shall call "the 2SA") was, as it is said, that it was "evergreen"; it included the right, likely to be very valuable, that, so long as its terms were complied with, it could be renewed by Arief on specified terms. The right was acquired at substantial indirect cost as $66,000 was paid to Celador for the 2SA, $2200 was payable to Celador per episode and not only had Arief to have produced and transmitted the show (which would have involved the large expenditure it had made on, inter alia, premium telephone lines and construction of the prescribed studio-set) but also a substantial down-payment had to be paid at renewal. Thus clause 3 provided:-

"3. In the event that the Licensee wishes to extend the Initial Term by twelve months the Licensee may do so (provided that it has previously complied with this Agreement) upon written notice to the Licensor on or before expiry of the Initial Term and thereafter for further consecutive twelve month periods by the same day and month in the preceding year of the Term subject to the following:-

(a) that the Licensee has produced and transmitted no less than 30 episode(s) for a sixty minute slot in each twelve month period; and

(b) payment of the Increased Episode Format Fee in respect of at least 30 episodes shall be made no later than the expiry of the written notice to be given specified above; and

(c) that the Licensee has complied with all the terms and conditions of this Agreement."

4. In other parts of the 2SA there were references to fundamental breach (clause 4 (d), persistent failure and material breach (clause 6 (d) (iii) and material breach (clause 13) but clause 3 specified no particular level of gravity for the failure to comply that would deny renewal.
5. A second crucial feature of the 2SA was that there were restrictions, to which I shall need to return in detail, as to what, to use a deliberately broad term, I shall call alienation by Arief.
6. On the 9^th April 2002 Arief made an agreement with RCTI in connection with production of WWTBAM in Indonesia. It included that the studio would be provided by RCTI. As the effect of this agreement is at the heart of the action I think it best to give it a neutral title, the "RCTI Agreement". I shall revert to it in more detail later.
7. With a view to taking advantage of the "evergreen" feature of the 2SA, on the 3^rd February 2003 Arief sent a deposit, $66,000, to Celador. It was returned by Celador. On the 17^th February 2003 Celador told Arief that "….. at present we are carrying out checks to establish whether or not you have complied with all the terms and conditions of the [2SA] which, as you are aware, is a condition which you must satisfy before any renewal of the Agreement is possible under …." the evergreen provision.
8. That caused concern at Arief; the show was still very successful; relations with Celador had seemed to be good and no complaints about the quality of the show or otherwise or even inquiries had been received from Celador such as to suggest that an "evergreen" renewal was in any doubt. Indeed, it has to be borne in mind throughout that not only was it never said by Celador that the show did not reach international broadcast standards but Celador, who were sent tapes of the Indonesian broadcasts, praised Arief as to the standard attained.
9. A team from Arief flew over and on the 3^rd March 2003 met Celador in London. There is in some respects conflicting evidence as to what was said and done at the meeting but it is plain enough that Arief was told there and then that the contract would not be renewed, not on any ground relating to the quality of the programmes as shown in Indonesia or for any financial or similar shortcomings but because, it was said, Arief had broken provisions of the 2SA prohibiting alienation.
10. By a letter of the 7^th April 2003 Celador informed Arief's Solicitors by way of confirmation that Celador would not be renewing the 2SA at the end of its term but added that Celador was not exercising what it claimed to be its right to terminate that Agreement ahead of its expiry.
11. The programmes authorised under the 2SA were all shown in Indonesia and that Agreement simply expired on or about the 1^st August 2003. In the meantime, on the 21^st May 2003 Celador granted a fresh licence as to WWTBAM in Indonesia to a subsidiary of an Australian television production company, Becker Group Limited ("Becker"). Evidence was led by Arief intended to show that Celador, RCTI and Becker to varying extents had together been involved, well before the expiry of the 2SA and even before Arief was told that there was to be no renewal of it, in steps either intended to displace Arief, if at all possible, or having the effect of its displacement, from its position as licensee of the show. The implication of Arief's argument is that, rather than Celador making any complaint to Arief (which might then have been immediately repaired by a licensee keen to retain a lucrative licence), instead Celador kept silent but urgently scratched about to find whatever possible justifications it might light upon to support its intended refusal to renew the "evergreen" 2SA.
12. On the 27^th May 2003 Arief launched these proceedings. The hearing before me is as to liability only; if I hold Celador to be liable to Arief then questions such as the amount of any damages and ancillary issues will require a later hearing. Many persons gave evidence either orally or by way of witness statement or summary of evidence; I hope I have paid sufficient attention to the others but I have preferred to give more weight to the evidence of those who both attended before me and could speak from their own personal knowledge.
13. I shall need later to refer in more detail to this alienation provision but it will be useful from the outset to have in mind that the only provision of the 2SA with which Arief is said not to have complied is clause 15. Its breach alone is relied on by Celador in its pleadings as providing the grounds for its refusal to renew the 2SA. Clause 15 provides:-

"The Licensee shall not be entitled to assign in whole or in part its rights and/or delegate its obligations hereunder and shall not sub-license the right to produce the Indonesian Series but may sub-license the right to broadcast in the Territory provided that it shall not be a term or condition of any such sub-licence that the sub-licensee acquire any unrelated rights or products. For the avoidance of doubt and without prejudice to any of the rights granted hereunder to the Licensee nothing herein shall prevent the Licensor from licensing and/or assigning this Agreement to a third party without the Licensee's consent."

14. As to liability only then, in broadest outline the question I shall need to deal with is whether Arief had so failed to comply with clause 15 of the 2SA that in all the surrounding circumstances Celador was entitled to refuse to renew it? That, though, breaks down into a number of lesser questions thus:-

(i) In terms of the true construction of the 2SA and having regard to the understood content of particular words in the television industry, did Arief breach clause 15?

(ii) In particular did Arief, either by way of entering into the RCTI Agreement or by way of its acts or omissions, so shift production from Arief or to RCTI that it breached clause 15?

(iii) If, prima facie, Arief was in breach of clause 15, was there such acquiescence, waiver or representation by, or estoppel of, Celador that it lost the right it otherwise would have had to refuse to renew the "evergreen" contract? I shall for simplicity call this subject "Waiver" although in the pleadings it is framed in several different ways.

However, before I go to such questions there are a number of general subjects it would be best that I should first address.

Claimant's Witnesses

15. Whilst the credibility of Arief's witnesses comes into play on the subject of breach of clause 15, the evidence of the witnesses for Celador, with the exception of Miss Linda Banowati's, was more concerned with the later subject of waiver. I shall therefore first look in a general way at the credibility of those of Arief's witnesses whose evidence was impugned, leaving a corresponding general look at Celador's witnesses, Miss Banowati apart, until later.

(i) Dato

16. Dato Dr Raun D. Atmosoumarto Al-Haj is the President and Controlling Shareholder of Arief. The title of "Dato" was conferred on him by the King of Malaysia in 1985 and it was convenient during the oral hearing to refer to him simply as "Dato". I shall do the same in this judgment.
17. The reliability of Dato's evidence was challenged by Mr Bate by reference to particular examples, to two of which I shall now refer. In paragraph 11 of his witness statement of the 27^th January 2004 Dato said:-

"……. between 1993 and 2001, I owned and ran the Best Western Hotel in California. I decided to sell off this hotel and channelled the proceeds to Arief to fund the project."

The "project" he was speaking of was the acquisition of rights to WWTBAM. He again referred to the sale of the hotel in his paragraph 12. In relation to raising the deposit intended to clinch the contract with ECM he said:-

"Due to the time difference between Europe and Arief's bank in California, I had some 9 hours to raise the necessary deposit, amounting $208,450. Fortunately Arief's bank in California had received the deposit from the sale of the hotel."

In cross-examination he first reiterated that he had instructed his bank to sell the hotel, a going concern, on the 19^th September 2000 and not before and that the sale was agreed in the 4^th week of September – on or about the 25^th or 26^th September – and that the deposit payable by the purchasers of the hotel came through quickly in the 1^st week of October. The purchaser, he said, had already made checks about the hotel's business. It was suggested to him in cross-examination that that was so unreasonably quick for a deal that must have involved both the sale of land and a sale of a hotel business as, in effect, not to be credible and Mr Bate asked Dato whether he would produce documents relating to this transaction. Dato did not oppose that but immediately agreed to the production of documents.

18. Comprehensive documents were then produced and Dato made a second witness statement, on the 18th March 2004. It revealed a different sequence of events. The hotel in California was only put on the market, rather than sold, in September 2000. A deposit was not received from the ultimate buyer until April 2001 and completion was not until September 2001. There had been an earlier prospective purchaser the sale to whom went off. It was not the hotel deposit monies but monies from a sale of shares in his retirement fund that had enabled Dato, it transpired, to pay the deposit to ECM. On refreshing his memory by going through the documents, Dato recognised that he had confused a call to his brokers to sell shares and to remit the deposit monies to ECM with a call to a different broker as to the sale of the hotel. It remained the case, though, he had used monies from the sale of the hotel to fund production costs in the early stages of WWTBAM. His second witness statement concluded:-

"It remains the case that I sold my hotel in order to finance WWTBAM, and I raised the deposit to pay to ECM within 24 hours of it being requested."

He was recalled for further cross-examination.

19. Mr Kay argues that the tale is one of mistake not mendacity. I agree. I take Dato to have been confused rather than his intending to mislead. He did not quibble as to the production of documents and the documents, including bank statements, when produced, whilst not utterly complete, were certainly comprehensive. Nothing would have been easier for Dato than for him to have claimed that he had telephoned the various brokers but that no records remained; on the contrary, however, documents had been unhesitatingly produced. So far as demeanour may be relevant, he gave every appearance of being completely at ease on the subject. He accepted that he had been mistaken and the core point of his evidence – that he had been very keen to get the ECM contract and that, at some personal cost, a large deposit had been produced at speed – remained the case.
20. The other and related attack on his evidence grew out of whether the earlier prospective purchaser of the hotel had been put off by the loss by the hotel of its Best Western franchise. The documents indicated that during an "escrow period" (beginning with agreement by that first prospective purchaser to buy the hotel in April 2001) the hotel had lost its membership affiliation with Best Western. The document concerned indicated that the prospective corporate purchaser was "no longer interested in pursuing the purchase of the property …" and that it and Dato mutually agreed to cancel the escrow in July 2001. The hotel was then later sold for about 3% less to the second prospective purchaser. It was nowhere said that the dip in price was attributable to the loss of the franchise. The topic of the franchise had come up in the first place because Mr Bate was suggesting that the risk of loss of the franchise would have been such a complication in any sale of the hotel as to make the very speedy first version of events as to its sale even less credible. After seeing the documents produced, Mr Bate suggested that if the first hotel sale had gone off because of the franchise position that was a complication. Dato did not agree. Whether or not the loss of the franchise was the or a cause in the first sale going off, whether the loss of the franchise could be regarded or was perceived as a complication in any sale, whether the lower price in the ultimate sale was attributable to the loss of the franchise and whether the loss of the franchise had in fact proved to be a complication in that second sale are all matters as to which the evidence was incomplete. That was hardly surprising since the issue was so far beyond anything material to the action. Mr Bate sought to represent the subject as being an example of Dato being prepared to speculate in the face of what his own agents, as revealed in the documents, had said to be the case but I do not take it to be so. The contemporary documents do not indicate a clear causal relationship between the loss of the franchise and the going off of the first sale (post hoc is not necessarily propter hoc) nor even of its being a complication in that first sale. I do not find Dato's evidence on the subject incredible or even as possibly unreliable; on the contrary, his evidence that the loss of the franchise could have been one possible factor amongst others in the going off of the first sale seems to me, given that quite often one does not fully know the reasons behind the decisions of another prospective party to a contract, to be entirely credible.
21. Accordingly Dato, in my judgment survives these attacks made on his evidence; I shall deal later with another such attack but I indicate now that, whilst there were passages in his evidence during which it was not possible to be sure whether he was playing for time or being evasive or, on the other hand, simply misunderstanding English forensic process or the questions put to him, having regard to his demeanour as a whole in the course of his evidence, I give him the benefit of the doubt. I thus hold him to have been in general a reliable and credible witness although, of course, given the inevitable difficulties and delays of translations to and from the Indonesian language, his evidence did not have the directness and freshness that one would have expected had English been his mother tongue.

(ii) Miss Nunung

22. Miss Nunung N.D. Heryuningsih ("Miss Nunung"), whose job title from Arief was "Co-ordinating Producer" of WWTBAM, found her evidence attacked as unsatisfactory, obfuscating, confusing and self-aggrandising. First it was said that her second witness statement alleged, without foundation, that she produced WWTBAM. It did not; her reference, properly understood, was to her carrying out that part of a producer's duties which related to working with question-writers and assessing questions. Then hostile references were made to her evidence on the subjects of her acquiring expertise "on the hoof", as it went along, of her sharing of some production duties with another (Jonathan Santoso), as to uncertainty as to whether Miss Banowati of RCTI was a producer and/or the Executive Producer of the recording stage of WWTBAM and as to the frequency with which she saw Miss Banowati during recordings. She said that she saw Miss Banowati on about 30 of the 52 recording occasions and that Miss Banowati was on those occasions apparently acting as Executive Producer. She, too, required an interpreter. I do not find her guilty of intentionally obfuscating or intending to confuse; on the contrary, given the difficulties inherent in evidence given by way of an interpreter, I found her evidence to be as straightforward as could be expected. I took her to be an intelligent young woman on whose evidence I could generally rely.

(iii) Other Claimant's witnesses

23. The other witnesses who gave oral evidence on behalf of the Claimant were Budi Tjandra Negara, Arief's IT Manager, Phillip Murray Livingstone, formerly head of International Production at Celador International Limited, and Tom McClelland, who had acted as General Manager whilst he had been at ECM. The evidence of these witnesses was not materially impugned.
24. The Claimant's witness statements included one from Jonathan Setiono Santoso and one from Augustin Perez Fajardo but in the event neither was put in evidence. Mr Santoso had been an employee of Arief from December 2000 onwards during the currency of the First and Second Series of WWTBAM in Indonesia. He was taken on to be and was described as a producer of WWTBAM. A reason was given by Arief's Solicitors to Celador's for Arief's not calling Jonathan Santoso to give oral evidence; it was that he was unwilling to come to London as his father was ill in China. Celador asked for a video-link to be set up so that Mr Santoso could be cross-examined but no arrangements were eventually made. Mr Santoso's witness statement for Arief had included, inter alia, two sentences, one saying that he had had responsibility for monitoring the recording of WWTBAM in Indonesia during both the First and Second Series and the other that he had worked as a producer on WWTBAM in Indonesia throughout both Series. Celador's Solicitors, as they were fully entitled to do, made inquiries and eventually made telephone contact with Mr Santoso. According to the inescapably second-hand evidence that I have on the subject from Celador, Mr Santoso told Celador's Solicitors that the witness statement which he had signed for Arief and which had been put in the bundle to be read by me contained two passages with which he disagreed; he had felt pressured to sign and had signed the witness statement. He said, though, that he had refused to sign an earlier and different witness statement put before him by previous solicitors acting for Arief. He confirmed that the reason given for his unwillingness to attend to give evidence was correct. He was not willing to give a witness statement to Celador but he did, at risk of confusion, say both that RCTI controlled production and that his job was to supervise production. He did not refer to either of the two sentences to which I have referred above as ones with which he was uncomfortable. In the circumstances I cannot at all be sure what he would have said had he attended to give oral evidence and I would feel unsafe in relying on either his witness statement or the second-hand account derived from his telephone conversation with Celador's solicitors. However, as it seems common ground between both accounts that he gave that he had a supervisory rôle during production of WWTBAM, I do not see his evidence of itself as materially countering Arief's case that it had an involvement in production.

WWTBAM

25. A relatively unusual feature of WWTBAM, in contrast with television programmes as a whole, is that it requires for its success a high degree of sustained participation by a public well beyond its studio audience and its watching public. Persons wishing to appear on the show, of whom it is sought to procure that there are many, are encouraged to call in on premium telephone lines. It is the not-insubstantial charges for those calls which go towards and, in the ordinary course, should meet the prizes which are awarded. Advertising and other steps are therefore taken to procure that many people keep on telephoning in. Candidates suitable for answering questions during a broadcast show in the so-called "hot seat" have to be selected and an audience, which participates beyond the usual ways of simply expressing approval or disapproval, needs to be found and needs to be provided for, along with the production-staff.
26. Another feature of WWTBAM, though doubtless one shared with other quiz shows, is that not only does a script need to be prepared for the host but questions need to be researched and set and answers carefully verified. Questions, which are expected to begin as fairly easy, are intended to grow more difficult as the potential prize grows and so they have to be not only set but also to be graded. Moreover, because, as part of the show's striving to be above suspicion, the questions for any particular contestant are selected at random from a stockpile of those of whatever grade is appropriate, computers need to be programmed and loaded to achieve the incorruptible randomness that is sought. Indeed, in general the show is very prescripted and computer-led. There is a highly-detailed production "bible" with associated technical drawings which Celador requires licensees to adhere to and, to preserve the impact of the show, there are very carefully prescribed lighting, music and sound effects which, with the aid of computers, have to be deployed at specific points in the questioning. The shape, size and even the colours of the studio-set to be used are all matters prescribed in greater or lesser detail by the licensor, which wishes its successful "Format" to be consistently reproduced and adopted wherever the performance might be.

"Production"

27. In the television industry the word "production" is a word that very commonly takes its colour from its surrounding context and, as it is used in many and varying contexts, it emerges as having a wide range of meanings. "Production" as a whole, at all events in relation to programmes, such as WWTBAM, which do not go out live, can be divided into three; pre-production, production and post-production. The word "production" on its own can cover all three or, depending on the context, any one or more of the three sub-divisions.
28. Pre-production can include a huge range of tasks such as the acquisition of rights, the arranging of finance, the acquisition of sponsorship and advertising, negotiations for prospective broadcasts, arranging for access to and use of studio facilities, the building of any specific studio-set required for the particular programme concerned, the drawing-up of budgets and arrangements for the availability and well-being of key staff, technical staff and of the audience and contestants. It is common for a television production company not to own but instead to hire a studio for its productions. In relation to WWTBAM the expression "pre-production" is competent to include arrangements for the initial procurement and continuing availability of premium telephone lines and arrangements made to publicise their availability and their intended use in relation to the show. Pre-production, in effect, is a phrase that is competent to include all that is necessary or desirable in bringing about a state in which the next stage – production or, as it sometimes called, "recording" - is able to be embarked upon. Given the particular needs of WWTBAM, as I have mentioned, its pre-production is competent also to cover such catering arrangements as should be desirable if the staff and the audience are to be expected, as is the case, to be in place over a number of hours.
29. "Production" for a show such as WWTBAM, when considered as the central of the three sub-divisions I have mentioned, consists of or includes the direction of the staff and audience and the direction, control and use of technical lighting, sound, camera and recording equipment so that, by later selection from the recorded material, an appropriate broadcast can be made.
30. "Post-production", as one of the three sub-divisions, consists of the editing of the material gained at the production stage so as to emerge with the best programme that can be broadcast and also of such arrangements as are then necessary for the edited-down programme to be broadcast.
31. The great breadth of the word "production" can lead to a corresponding or related width in the word "producer". I do not understand it to be a misuse of the word "producer" for it to be used in relation to a person who is concerned only at the pre-production stage or, a little less likely, only at the post-production stage. A person so engaged could without misuse of words be called "a producer" but would be unlikely to called "the producer". "The producer" is more likely to be a person concerned with the central or recording stage as I have described it, either with that stage alone or also with one or more of the other two stages. The person who is thus in charge at that central stage is quite likely to be called "the Executive Producer" or even "an Executive Producer" as there may be more than one. It is not uncommon for the production company concerned and the broadcaster each to appoint an "Executive Producer", each looking chiefly, if not wholly, to the overlapping interests of their respective employers. Mr. P.M. Livingstone, formerly head of International Production at Celador, who was called to give evidence by Arief, said television was an area where very often persons' titles bore little relevance to what rôles they did. It is, in my judgment, right that I should have in mind, when coming on to answer the questions raised in these proceedings, the great width, if not uncertainty, in the content of words such as "production" and "producer" in the television industry.

Arief's obligations as to production in the 2SA

32. There are, as one would expect, very many provisions in the 2SA of a kind likely to be found in a commercial licence of rights to a quiz show but there are relatively few that cast some positive obligation on Arief as to what one might call "production". The subject of positive obligations is relevant as I shall later need to consider whether there was a delegation by Arief of its obligations.
33. It should suffice, rather than for me to set out whole clauses, for me to refer to them in outline. Thus, by clause 1 (a) of the 2SA Celador granted rights to Arief "to produce" episodes of the "Indonesian Series", an initial minimum of 30 episodes. Arief was given a corresponding right to transmit them – clause 1 (c). Those provisions were permissive rather than such as to create obligations but Arief was required to render a statement as to episodes it produced – clause 2 (b) (iii). By clause 2 (d) it agreed "To produce and transmit" at least 30 episodes during the first relevant period of 12 months. Those are the only positive obligations to "produce" or as to "production" which use those terms. In order, at the first renewal opportunity, to be able to obtain the benefit of the "evergreen" provision Arief again had to have "produced and transmitted" not less than 30 episodes over the relevant first period – clause 3 (a). As to obligations not, as such, to produce or as to production but such as may relate to production, Arief agreed that "it" would utilise specific music, software and logo elements – clause 5 (a) (i) (iii) and (iv) - and would ensure the use of specified musical cue material – clause 5 (b). Arief warranted that the Indonesian Series would be of first class quality – clause 6 (d) (ii) - and that there would, save exceptionally, be no alterations to the defined "Format" for the show – clause 6 (d) (i). In the "credits" for each episode, acknowledgement had to be given to Celador – clause 11.
34. Save in circumstances in which a production company was known also to be a broadcaster, not the case here, no one would expect a production company itself to broadcast. In the context of Arief and Indonesia, it would have been unthinkable that the obligations on Arief "to produce and transmit" WWTBAM included an obligation that Arief itself should be the broadcaster. What was contemplated as to broadcast was vicarious performance; Arief was to see to it that there were broadcasts by another or others rather than itself performing the task. The very fact that only vicarious performance was to be expected of "transmit" is a factor to be borne in mind in assessing what was to be expected of "produce" within the phrase "to produce and transmit".
35. It is, though, clear on the evidence that a company may be fairly regarded as a producer of a given programme even if it hires-in production expertise. To take an extreme example, to which I shall later return, the production of sandwiches to the audience and to contestants during breaks in recording can be regarded as a component, albeit a minor one, of "production". No-one, though, could say of a company that it had ceased to produce or to be a producer merely because, rather than having sandwiches prepared and served by its own officers and employees, it had ordered them from a local sandwich shop. But is there a limit to what can be done by others if the company is still to be regarded as the or a producer? To take the other extreme in the "sandwich" example, if a company has alienated all tasks falling within the description "production" save for the provision of sandwiches, surely one could not any more call it a producer of the show.
36. Rightly recognising that it is not required of a production company that it should do all required tasks directly by its own officers or employees, Celador, as its first position, asserted that as a minimum "key" staff should "work for" Arief.
37. I am not able to accept that the 2SA casts such a positive obligation on the licensee. Had that been intended one could reasonably expect "key" personnel to have been defined and some attempt made to explain what would be meant by "work for" in the context of an industry in which the engagement of individuals not directly as employees but by way of self-employment and service companies is commonplace. There was real uncertainty, on the evidence, as to what the "key" staff would, as an irreducible minimum, consist of, and as to whether they would have to be part-time or full-time, even though recording was only at intervals. It was accepted by a number of Celador's witnesses that even an Executive Producer could be "hired-in" by a licensee rather than being employed directly by it. It was acknowledged, too, that the fact that a broadcaster had an Executive Producer did not preclude there being an Executive Producer employed or hired-in by the licensee; the two, so to speak, could live together. Indeed, even looking to Celador's own practice, cases can be found in which the licensee remained such despite some other body undertaking production of the show. Mr Livingstone, whose evidence I accept, gave Chile, Venezuela, Russia, Kazakhstan, Croatia, Turkey and Slovakia as territories in which the WWTBAM licence was held by someone other than the company undertaking the production and transmission of the show. Chile was a particularly striking example as the licensee there was a multi-national soap and cosmetics company not even holding itself out as being, or as having or hiring the skills and expertise of, a television production company. Mr Graham Spencer, Celador's Format Business Development Manager, said, of the Chilean case, that as the licensee ultimately had contractual responsibility to see that everything was done according to the Format, there was no breach. As Mr Kay argued, no logical basis appeared for supposing that if, as was common ground, some staff could be hired-in, why should not all? The difficulty led Mr Bate to argue, as a second position, that the licensee had to be a TV production company.
38. There is, though, no provision of the 2SA that requires the licensee to be a television production company, however such a company may be detected or defined. There is no suggestion that it was ultra vires Arief to produce WWTBAM. It is, rather, by the acts or omissions of the licensee that, for the purposes of clause 15, the renewability is to be judged, not by reference to some ill-defined label. Mr Bate argues that if (in breach of a supposed requirement of clause 15) a licensee (not being a television production company and hence, he said, having no available production expertise) had to hire-in an entire production team, it would have no means of knowing (as it had to have) whether the show was being properly produced. In my judgment that argument runs into the sand. One response would be that Arief, not being a TV production company and having therefore to hire-in everybody, by its own performance refutes that argument by its managing for years to have seen to the broadcast of shows of a praiseworthy standard. Alternatively, Arief, having all along had, to judge from the quality of the shows, adequate expertise and staff available to it, would have shewn itself by any definition to have been a television production company. I add, firstly, that there is no pleaded complaint that Arief was not such a company and, secondly, that Celador, in the negotiations for the 2SA, made no enquiries as to the expertise available to Arief from its own officers and employees.
39. In the light of these difficulties it may be right to construe such positive obligations as there are in the 2SA as to production by the licensee not by reference to employment of some understood or required minima of particular staff (because none such was required or is to be understood) nor by reference to some undefined corporate nature of the licensee but rather by looking to the licensor's commercial purposes in introducing clause 15.
40. The licensor is concerned in particular to see to it that the show is regularly seen, that its quality is maintained, that it is duly paid for and that Celador's rights to it and its ancillary rights are duly acknowledged and not threatened. Such commercial purposes are, as it seems to me, adequately served if the licensee remains contractually liable to the licensor and retains at least ultimate practical control over the three stages of production.
41. With that general approach in mind and remembering, too, that no breach is alleged of such positive obligations as there are as to production in the 2SA, I return to what is, as I mentioned earlier, the only provision of the 2SA that is said not to have been complied with, its clause 15 which I cited in paragraph 13 above. The alleged breaches are broadly divisible into two; firstly, entry by Arief into the RCTI Agreement and, secondly, by way of Arief having no involvement in, but instead causing or permitting RCTI to be "responsible for" at least a number of the elements of the production of WWTBAM. I shall take the latter first but each limb of the overall allegation requires one first to look at the RCTI Agreement.

The RCTI Agreement

42. The RCTI Agreement was made, only shortly after the 2SA, on the 9^th April 2002 between Arief, acting by Dato, and RCTI. It recites that Arief is the legitimate holder of broadcasting rights to WWTBAM in Indonesia and recites also earlier agreements between the parties. Article 1 is headed "Purpose of the Agreement" and provides:-

"The Parties jointly agree that the purpose of the present Agreement shall be to transfer broadcasting rights in accordance with the provisions contained herein."

Article 2 is headed "Broadcasting and Presentation Rights" and Article 3 specifies a format of 60 minutes per episode with detailed specified breaks for advertising and promotion but it is Article 4 – "Production" – which has attracted the most attention. The relevant parts of Article 4 provide as follows:-

"4.1. The Parties agree that program production for the purposes of this Agreement shall be understood to mean the following:

a. WWTBAM program preparation consisting of:

(i) Provision of a Master of Ceremonies, with costume;

(ii) Selection and co-ordination of participants;

(iii) Provision of Studio 1 RCTI with production equipment;

(iv) Compilation and arrangement of questions;

(v) Provision of WWTBAM production staff;

(vi) Provision of snacks or lunch/dinner;

(vii) Provision of a comedian to entertain the audience.

b. Production shall also include the WWTBAM program recording and editing processes.

c. Production costs shall be understood to mean all costs incurred as a result of the activities listed at paragraph 4.1 sub-paragraphs a. and b. above;

4.2. The Parties agree that all matters concerning the production activities listed at paragraph 4.1 above shall be the responsibility of the Party of the Second Part [i.e. RCTI];

4.3. [RCTI], with the approval and consent of the Party of the First Part [Arief], shall be entitled to appoint or determine (i) the Master of Ceremonies (ii) the Studio 1 RCTI facilities and other support equipment to be used (iii) the production staff and (iv) the compilation and arrangement of question material;

4.4. The Parties agree that for the first broadcast of WWTBAM the Master of Ceremonies shall be Mr Tantowi Yahya who, if the need should arise, may be replaced subject to the mutual consent of both Parties;

4.5. The parties agree that for the purpose of the present Agreement each WWTBAM program pre-recording must be completed in 1 [one] day.

4.6. The Parties agree that [RCTI] shall be required to submit the production schedule to [Arief] no later than 5 (five) working days prior to program production;

4.7. The Parties agree that [RCTI] shall not incur production costs greater than Rp. 125,000,000 (one hundred and twenty five million rupiah) per WWTBAM episode and that the costs shall be borne equally by both Parties;

4.8. The Parties agree that [RCTI] shall appoint a WWTBAM program "Project Officer" responsible for coordinating and keeping [Arief] constantly informed of all actions taken, including but not limited to production problems, promotion, marketing, and financial matters relating to the WWTBAM program;

4.9. For the purposes of paragraph 4.3. above [Arief] or persons appointed by them in writing shall be entitled to oversee and issue guidelines with regard to the running of WWTBAM programs so as to ensure that the quality of productions meets international standards."

There were other provisions in the RCTI Agreement which conferred upon Arief some ability to intervene or control. Thus Article 5.1 provided that:-

"[Arief] shall be entitled to investigate and request that immediate improvements or replacements be made in respect of unsatisfactory stage and/or production equipment employed under the terms of the present Agreement."

Similarly clause 5 continued:-

"5.3. [Arief] may request that a program be reproduced without further cost of any kind if, according to [Arief] and/or their Principals, it is evident that the technical quality of a WWTBAM production is unsuitable for broadcasting or fails to meet international WWTBAM production standards as a result of the fault or failure of [RCTI]."

5.4. [Arief] or their legal representatives shall be entitled to enter [RCTI's] working areas which, for the purpose of the present Agreement, shall be limited to Studio 1 RCTI, the computer room and control room as well as any other technical facilities owned by the latter Party and associated with WWTBAM production.

5.5. [Arief] shall be entitled to call coordination and evaluation meetings with [RCTI] for the purpose of improving WWTBAM productions.

43. Whilst selection of participants in the programme was, as has been seen from clause 4.1 a. (ii) above, to be understood to be part of "production", Article 5.11 provided that Arief or other party appointed by it should be required "to prepare a list of contestants (recruitment) using a premium call number". By Article 5.13 Arief was required to lend the WWTBAM stage sets and computer equipment to RCTI during the currency of the Agreement. Article 6.5 made provision for training of RCTI's production staff by Arief or Arief's principals. Under Article 6.6 RCTI was required to ensure that the studio to be used – "Studio 1 RCTI" or "RCTI 1" – had a full range of production equipment. By Article 6.12 RCTI undertook to recruit contestants using premium number calls and to engage in WWTBAM promotional activity as was there specified. However, an important part of pre-production, negotiation with existing or prospective sponsors, was not, as I read the RCTI Agreement, awarded to RCTI or taken from Arief and media promotion plans had to be submitted by RCTI to Arief.
44. The RCTI Agreement was specified to last 12 months or until the 52^nd episode of the programme had been shown but, if either party failed to meet or contravened a contractual obligation within it, the other was entitled to terminate unilaterally on giving 30 days' notice. By Article 16 the applicable laws were specified to be the laws of the Republic of Indonesia.

Breach of clause 15 by way of acts or omissions of Arief?

45. Leaving aside, for the moment, possible breach by way of Arief's entry into the RCTI Agreement, Celador's complaint, which is in paragraph 12 of its Amended Defence and Counterclaim, is that Arief had delegated its obligations under the 2SA and/or had assigned in whole or in part or had sub-licensed the right to produce WWTBAM in Indonesia in that (as specified in Particulars in paragraph 12 (ii)):-

"(ii) RCTI has been responsible for, at least, the following elements of the production of WWTBAM in Indonesia: selecting final contestants; briefing and researching of final contestants; installation of audio, light and camera equipment, including providing personnel; coordinating prizes; sourcing questions; management and operation of the computer system required for production including relevant data bases; preparing meals and refreshments; makeup, arranging transportation and accommodation of contestants; providing the studio; providing production personnel; monitoring the operation of the data base of questions in the taping process; as evidenced by a fax wrongly dated 1^st April 2002 rather than 1^st April 2003 from RCTI to [a Becker subsidiary]."

In the event, as no evidence was given by either RCTI or Becker, that wrongly dated fax played no significant part in the case.

46. In addition Celador did not admit that Arief had some involvement in such activities. By paragraph 17 of Celador's amended Defence and Counterclaim it was alleged that it was by reason of the facts and matters in its paragraph 12 that Celador was not obliged to renew the 2SA. The very detailed nature of the allegations requires a detailed look at what in fact was done by Arief by way of its officers and employees during the currency of the 2SA and of the RCTI Agreement. The evidence on these subjects was principally given, for Arief, by Dato, Miss Nunung, Budi and, for Celador, by Miss Banowati of RCTI.
47. Whilst Dato as the senior figure in Arief was sometimes out of Jakarta and, no doubt, out of Indonesia and although he attended, I suspect, at the studio rarely if at all during the Second Series, he had meetings with Miss Nunung and others from Arief about the show when he was in Jakarta. He proposed the budget of the show, not just as between RCTI and Arief but as a whole. He oversaw the whole project but in the sense only, I hold, of receiving information from others and giving general strategic guidance, in particular to Miss Nunung and perhaps also to Jonathan Santoso. He had played a more active rôle in the setting up and running of the earlier series than in the second but still had a supervisory albeit more distant rôle in the Second Series and he continued to be listed on the credits as Executive Producer.
48. For reasons I have already given I shall say little about Jonathan Santoso's work but I had a full explanation from Miss Nunung as to her activity. She was chided for her lack of experience in television but I have no doubt but that she was a quick and capable learner during the first series and up to speed, in relation to the tasks required of her, by the time of the Second Series. She performed many tasks; she was assistant to Dato in his rôle of Executive Producer; in relation to tasks outside the stage of recording she acted in sales and marketing aspects of WWTBAM and as to promotion and accounting and she undertook work as to the legal questions that arose (as they did) and in research and development, which required study of the show's ratings from time to time. She met sponsors. Much of all that involved far less work for the Second Series than it had done for the first but nonetheless that which, within such descriptions, was required to be done was done by her. She deployed her Master's Degree in Marketing in what she described as "qualitative and quantitative research".
49. She played a needed rôle in connection with the writing, selection, storage and use of questions to be used during performances, issues which occupied a good deal of oral evidence. Persons had to be selected as prospective question writers. They needed to be given general guidance as to the nature of questions which were likely to be adopted by the show. As I have mentioned, the questions proposed had to be vetted. The answers needed to be carefully verified if legal proceedings were to be avoided or, if proceedings could not be avoided, if they were to lead to decision in WWTBAM's favour. The questions had to be overseen to ensure that they were of a kind likely to engage the Indonesian audience and they had to be graded as to difficulty. With their answers they needed then to be put into computerised form in the computer owned by Arief, in which they were stacked by disk. Then, during the recording stage, it had to be ensured that an appropriate level of question, selected at random from the stack of questions at that level, would be and then was fed to the host and to the contestants by way of slave and message computers. In all these tasks Miss Nunung performed the rôle of a question producer during the greater part of the Second Series, having either taken over such duties from another, Bernita, not an employee of Arief but of RCTI, or supervising Bernita in the job. She also operated the slave computer for at least part of the Second Series.
50. Moreover, beyond evidence as to such specific tasks, Miss Nunung gave evidence of Arief's overall supervisory activity. She was on the set and if Arief was not satisfied with some aspect, it (presumably by way of herself or Jonathan Santoso) would raise a question and have things changed as required. Arief was responsible for the whole performance, including such as was done or required to be done by RCTI.. Arief did complain when that was appropriate, an example being in relation to questions, as to which some RCTI responsibility was taken over by herself and by Budi. Quality of production was her main concern, Arief's supervisory function being to make sure the show ran smoothly. Even where a relatively technical subject such as make-up or lighting was concerned, if, from her monitor, she detected what she thought would become (subject to editing) broadcast material that was not up to quality, she said it was her job to intervene. Whilst RCTI did the post-production work she it was who compared what was being prepared with the production "bible", strict compliance with which was required by Celador. She would have to discuss matters with the Director as the whole idea, she said, was to get the picture right. She it was who was in the most frequent contact with Celador, including upon technical subjects relating to production, although Budi, too, was in such contact.
51. In some respects Miss Nunung's evidence conflicted with that given by Miss Banowati.
52. Miss Banowati's evidence was flawed. She had not understood that, save where she might explain otherwise, she was to depose only to matters within her own personal knowledge and so, on a number of topics, by no means all unimportant, she gave what at first appeared to be direct evidence but what, when examined, proved not to be such. She was, moreover, found to be mistaken on another topic, a mistake she sought to explain by saying that she had not had time completely to read her witness statement and that she had not read it carefully enough. I prefer Miss Nunung's more careful evidence. Nor was Miss Banowati's evidence always wholly consistent; she was undoubtedly an Executive Producer of the Second Series. It is common enough, as I have mentioned, to find a broadcaster, such as her employer, RCTI, having an Executive Producer in a show produced by a separate production company but she sought to extend her rôle as Executive Producer beyond a relationship with the broadcaster and asserted she was Executive Producer even as to all pre-production. She said there was no Executive Producer of the Second Series but her. Even as to conferred titles I do not accept that to have been the case; Dato was described in the credits as an Executive Producer but, looking beyond job titles to the work done, there were many and important tasks which one would expect to be done by the person in overall charge which were done by others than Miss Banowati or RCTI. Thus, whilst asserting that she was Executive Producer as to pre-production for the Second Series, she nonetheless had to concede that it was Arief, by way of Jonathan Santoso, that had been responsible for building the studio-set and that the important premium telephone lines were the responsibility of Arief. Dato had given evidence as to the expensive arrangements made by Arief for their acquisition. It was Arief that conducted negotiations with and acquired sponsors for the show.
53. The passwords for the computers, without which they would not function, were kept from her and from RCTI. It was Budi of Arief, head of IT, who checked whether the computers were working and it was Miss Nunung not Miss Banowati who was in frequent contact with the licensor. She was not in a position to countermand Arief; although she was unhappy at some of the credits given in the title sequence in the Second Series she was told that they were what Arief had wanted. It was Arief, she accepted, that produced the 20-30 contestants from whom a smaller selection was then made; it was Arief, not her, that had selected the computer hardware and software and there were matters of financial accounting during the Second Series that lay outside her responsibility but fell to Arief, which dealt with recurring expenses whereas RCTI dealt only with "one-off" ones. Although she had asked for such, she did not even have a complete version of the production "bible"; Miss Nunung had that as the licensee's representative and where Miss Nunung required change to be made in order to comply with the "bible", change was made. Responsibility for adherence to the Format lay with Arief.
54. Nor was she, Miss Banowati, well placed to deny Miss Nunung's evidence as to what Miss Nunung actually did; even during recording Miss Banowati was out of the studio itself for a small part of the time and in any event the part of the overall studio where Miss Nunung worked was the part which Miss Banowati least often visited. Such was the lay-out that even were she to visit, it could well have been that if Miss Nunung had been at her post (and she accepted that Miss Nunung watched the shows from the monitor in the computer room) Miss Banowati would not necessarily have been able to see her.
55. I bear in mind Miss Banowati's evidence. I do not mean to belittle her rôle as the broadcaster's Executive Producer and I do not think she meant to mislead but she was in a number of respects mistaken or unreliable. It was on her evidence that Celador chiefly relied as to what was actually done or not done during the making of the Second Series but I was more impressed by the evidence on those subjects which came from the Claimants. In any event, it was not Miss Banowati's evidence that Arief did nothing or was ousted from production, rather that Arief and RCTI worked together.
56. A difficulty which bedevilled some of the evidence and, indeed, the pleading I have cited is that expressions such as "to be responsible for" or as to some task being someone's "responsibility" are terms which, in ordinary usage, can, in relation to tasks, be somewhat ambiguously used to refer to either or both of having the task, on the one hand, assigned to one so as to be "responsible" for it, liable to someone else for its due discharge or not, and, on the other hand, actually doing that task. In the former sense Arief was throughout contractually "responsible" for production to Celador but in respect of the Second Series my impression from the evidence as a whole is not only that ultimate practical control, the final practical say-so actually exercised, as to any matters of importance relating to production in the broader sense, of WWTBAM in Indonesia resided in Arief but also that Arief had a substantial rôle in pre-production and that Arief by its officers and employees had important specific rôles in the central or recording stage of production. At the very crudest of levels, if, in order, say, to enforce compliance with a quality guideline given by Arief under the RCTI Agreement, Budi, an Arief employee, did not turn up with his key and password to turn on and authorise the working of the computers, no show could take place.

Breach of clause 15 by way of entry into the RCTI Agreement?

57. It is said by Celador that, by Arief's entry into the RCTI Agreement, Arief, upon a true construction of it, did one or more of the following things namely:-

(i) It delegated its obligations under the 2002 Agreement;

(ii) It assigned in whole the right to produce WWTBAM in Indonesia;

(iii) It assigned in part the right to produce WWTBAM in Indonesia;

(iv) It sub-licensed the right to produce WWTBAM in Indonesia.

These complaints emerge from the heading to paragraph 12 of Celador's amended Defence and Counterclaim and Particulars at paragraph 12 (i). I shall assume, for the purposes of this heading, that if, in point of construction of the RCTI Agreement, there is an offending alienation, it would be no defence to Arief that in fact that alienation had not been duly implemented.

In this context I take "assignment" to mean a complete alienation of the subject-matter assigned (although, perhaps, with a possibility of a reverter); the assignee, to the extent of the subject-matter assigned, steps wholly into the shoes of the assignor much (though not exactly) as an assignee of a lease finds himself in a direct relationship, as tenant, with the landlord who, before the assignment, had been the landlord of the assignor. The erstwhile tenant then finds himself ipso facto no longer in the relationship he had previously had with that landlord.

58. If that is right, then I cannot see there to have been any assignment here. It is no part of the effects of the RCTI Agreement that RCTI stepped into Arief's shoes or that Arief stepped out of them in terms of a contractual relationship with Celador. No rights that Celador had against Arief were moved from Arief to RCTI, nor was it that any rights Arief had against Celador moved to RCTI so that RCTI could assert them contractually against Celador. I thus do not find any failure to comply under headings (ii) and (iii) above.
59. As for heading (iv), "sub-licence" supposes an oral or written agreement granting rights of such a kind. Only the written RCTI Agreement is relied on as, in point of construction, being such a thing. The sub-licence that is prohibited by clause 15 is one of "the right to produce the Indonesian series". It may be argued, if literal attention is paid to the definite article, that what is prohibited is the sub-licence of that right only, the one granted under the 2SA, the right as against Celador to produce the Series. There was no sub-licence of that right. That, though, may be to add nothing to the prohibition on assignment in whole or in part and accordingly I think it right at least to consider the prohibition as being against sub-licence of a right to produce the Series. It is notable, though, that what is prohibited is not a sub-licence of production but of a right to produce. Further, as what the 2SA was concerned with was production as a whole not just severable component parts of it, even if it is right to consider whether a right to produce was sub-licensed, that right can be expected to be a right to production as a whole. That gives rise to this question; did the RCTI Agreement sub-licence a right as a whole to produce the Indonesian Series?
60. By way of the RCTI Agreement RCTI manifestly obtained many rights against Arief relating to production but as to important elements of production as a whole the approval or consent of Arief was required before RCTI could venture forward and, in point of construction, a high degree of control remained in Arief. The Master of Ceremonies could not be changed without Arief's consent. RCTI's production schedules had to be submitted to Arief at least five days in advance. Arief put a contractual cap on production costs. RCTI had to appoint a Project Officer to keep Arief fully informed as to all actions taken. RCTI could not take more than the prescribed time for pre-recording. Arief was entitled to oversee the WWTBAM programmes and to issue guidelines on the subject so as to ensure that quality was maintained. Arief was entitled to demand improvements or replacements as to production equipment and it could require a programme to be altogether done again if in its view (or that of Celador) the programme had failed to meet a proper standard. Should RCTI have failed to comply with the provisions of the RCTI Agreement then Arief as complainant could issue a first written warning followed by a second written warning and bring the Agreement to an early end – Article 12.2 of the RCTI Agreement.
61. I have not been given any guidance on Indonesian law but, taking it, for want of contrary evidence, to be the same as English law, then, on a literal reading the right to produce the Indonesian Series was not, in my judgment, sub-licensed. The right, as I have mentioned, was a right as against Celador but none such was granted to RCTI and it is hard to see how RCTI could be said to have acquired the right to produce that series, a minimum of 30 shows, when such rights as RCTI did acquire were so qualified or readily defeasible and covered only parts of production as a whole. Given the limited participation of RCTI by way of the terms of the RCTI Agreement in pre-production and given also the way in which other aspects of production by RCTI were subject to constraints or to the need for approval by or consent from Arief, in point of construction, no right to produce, meaning a right in respect of all parts of production, was, in my view, sub-licensed by way of the RCTI Agreement. I thus do not find any failure of Arief to comply with heading (iv) of paragraph 57 above. It will be remembered that Arief, if it thought it appropriate, could in a proper case require a whole programme to be made afresh.
62. As for heading (i), delegation of obligations, it is possible to argue, on an "expressio unius" basis, that, in contrast to assignment of rights, where assignment of part only expressly sufficed to amount to a failure to comply with clause 15, that only a delegation of all Arief's obligations would so suffice. That, though, would lead to what, in commercial terms, would be improbable. For example, the task of production of a series includes such things as provision of food for those engaged and of a comedian to "warm-up" the audience. That is common ground; indeed Arief would have found it difficult to deny that given that both are expressly included within the meaning of "program production" for the purposes of the RCTI Agreement. But, to revert to the "sandwich" point, could one fairly say that there had been no delegation of its obligations by Arief if it entrusted to RCTI every one of its obligations to Celador except the provision of lunches or the supply of a comedian? Whilst that would, in its commercial context, be, in my view, an absurd construction of the 2SA, I cannot think that the delegation of any obligation would necessarily be a breach by Arief. It would be equally absurd to regard Arief as not complying with the 2SA were it merely to contract-out provision of sandwiches or if it let another – perhaps the broadcaster – provide the warming-up comedian. If, then, there can be breach by Arief without its delegation of all its obligations and yet no breach upon its delegation of some one or more of them, what is the test for ascertaining whether there has been a failure to comply? To establish a test it may be right to look again to the commercial purpose of clause 15.
63. As to that, I have no reason to believe Celador did not enter into the 2SA in good faith. Clause 15 was, on that basis, not set as a trap but rather to serve a real commercial objective. In a television industry in which those in overall charge of production habitually use sub-contractors and agents for the very many tasks and skills required between the initial concept and the final broadcast, the objective of clause 15 could not have been that Celador intended by that provision to ensure that every aspect of production as a whole was carried out only by the officers and employees of Arief and that all production equipment was to be provided only by Arief itself. Rather, in my judgment, the objective of clause 15 was to ensure that, notwithstanding that Celador had ceded rights in relation to the Series to another, it nonetheless, by its contractual control over Arief, its chosen licensee, remained able to ensure that the Indonesian Series was of first class quality, was made with minimal alterations to Celador's internationally known format, that the game was regularly shown, was duly paid for and that no-one but Arief would acquire any rights such as might threaten Celador's enjoyment of its copyright and its other rights in and related to WWTBAM but rather that Celador's title should be repeatedly acknowledged.
64. Celador had a degree of control over Arief by reason of an ability to terminate the licence forthwith upon notice of any material breach – clause 13 of the 2SA - and the ability to withhold renewal on favourable terms in a proper case. On the twin footing that, firstly, only breach of clause 15 rather than any material, persistent or fundamental breach as referred to in other parts of the 2SA is asserted by Celador and, secondly, that in the TV industry vicarious performance was commonplace, the test for delegation of obligations for the purposes of clause 15 becomes, in my view, an inquiry into whether Arief by its arrangements had so entrusted functions in relation to production as a whole as to have jeopardised the achievement by Celador of its commercial objectives lying behind clause 15.
65. As to that, some of the aspects of Celador's commercial objectives, as I have identified them, remained completely unaffected by the RCTI Agreement. Nothing, for example, in the RCTI Agreement affects payment by Arief to Celador, either as to the amounts or times of payment. The computer equipment to be used by RCTI was to be that of Arief – Articles 5.14 and 6.2 – and hence was to be that required by clause 4 (d) of the 2SA. The task of preparing a list of contestants remained with Arief (Article 5.11). The studio-set for the programme remained in Arief's ownership – Article 5.13. Training of personnel remained a task for Arief – Article 6.5. There are several provisions between Arief and RCTI which cover subjects covered in the 2SA but which do not cut across the 2SA or in any way diminish such control as Celador had by its ability to exercise contractual rights against Arief. The provisions for showings of the programme in Article 2 of the RCTI Agreement were, it would seem, calculated to lead to performance of Arief's obligations to Celador. Arief was kept informed as to what was to be done by RCTI - Article 4.8 - and the achievement of international television standards was regulated by Article 4.9 and Articles 5.1-5.5. Arief was apparently able to terminate the contract on 30 days notice upon RCTI's failure to meet "a contractual obligation" (as opposed to upon a breach of a material or fundamental term as in the 2SA) – and Article 15.2 enabled that to be done without a decision of the Court being required – Article 15.3.
66. If a strict literal reading is given to clause 15 then there has been no delegation by Arief of its obligations, meaning all its obligations. Not even all aspects of production as the middle of the 3 stages were delegated and ultimate practical control of production as a whole was retained. I would regard the use of hired-in staff but over whom control still lay with Arief as not amounting to a delegation even of any such obligations as were so dealt with. If, instead, one is permitted to look to the commercial objectives of clause 15, then in my judgment there was no entrusting of tasks to others such as impaired or threatened to impair Celador's achievement, by way of contractual enforcement, of those commercial objectives which were intended to be served by the provision in clause 15 against delegation of obligations. I thus hold there to have been no breach of clause 15 of a kind such as could be described as a delegation of its obligations within the meaning of the clause. Indeed, in an industry in which vicarious performance is common, it would be difficult to regard the RCTI Agreement as including such an offensive delegation as would breach clause 15 when Arief's control was such that it could, in what it regarded as an appropriate case, require the whole show to be made again.
67. I have so far looked at the two chief components of Celador's particulars given under paragraph 12 of its amended Defence and Counterclaim separately but now looking at them together and looking also at paragraphs 13, 14 and 17 of that pleading, I find no breach of clause 15 of the 2SA. I find that Arief had some involvement in many of the activities set out in paragraph 12 (ii) of that pleading. I find that Arief remained as the executant of much of pre-production, as the employer of persons with significant rôles in production, as the person responsible to Celador for all production and as the person having actual ultimate practical control of all production. I do not find that by reason of the facts and matters referred to in Celador's paragraph 12 that it was not obliged to renew the 2SA; on the contrary I hold Celador to have had no sufficient reason not to have renewed the 2SA.

If Celador did acquire a prima facie right not to renew the 2SA, did it lose it? Waiver, Parts I and 11

68. If, contrary to my conclusion so far, Arief had failed to comply with clause 15 of the 2SA and thus fell foul of its clause 3 (c) so that prima facie Celador was entitled to refuse to renew, did Celador nonetheless lose that entitlement by way of some acquiescence, waiver, representation, estoppel or common assumption?
69. Under this heading I have to assume, contrary to my earlier holdings, that, in effect, Arief had next to no involvement in production as a whole. Arief relies, in broadest outline on:

(i) The terms of an earlier agreement it made with ECM;

(ii) Discussions in 2001;

(iii) Celador's awareness, in 2002, during the currency of the 2SA, of RCTI's assistance to Arief in the production of WWTBAM and the fact that nonetheless Celador raised no complaints and continued to express satisfaction with the quality and manner of WWTBAM's production.

I will take these in turn but I shall need to interpose between (ii) and (iii) a passage as to Celador's witnesses and some observations as to some later stages in the overall chronology.

(i) The ECM Agreement

70. On the 20^th April 2001, as I mentioned in paragraph 1 above, Arief contracted with ECM and hence became licensee of WWTBAM in Indonesia.
71. There was evidence that even earlier, in September 2000, Celador had been informed by ECM that Arief was a "block-timer" and was content with the arrangements that ECM was making with Arief. However, as even an active production company can be a block-timer, it was far from clear to me that the term "block-timer" indicated sufficiently clearly to Celador that Arief (as I am here assuming) was an entity that would have little or nothing to do with production. Moreover, even had that been the case in 2000 it would not follow that Celador knew of or would be content with Arief's remaining to have little to do with production (had that been the case) even after, in the terms of the 2SA, it had contracted afresh for the Second Series in April 2002.
72. The ECM Agreement of 20^th April 2001 gave Arief the right to renew the licence for only a second series, so long as the Agreement had previously been complied with. In that sense the 2001 Agreement was more "biennial" than "evergreen"; it was renewable as to one season only as opposed to the 2SA which, (though Mr Bate would wish to reserve this issue) appears at first blush to be, subject to compliance, renewable season after season. Celador, by its earlier name of Entertainment Developments Limited, had, on the 7^th October 1999, granted rights to ECM whereunder ECM could authorise production of WWTBAM in many countries including Indonesia. However, I find no term, express or implied, in those 1999 or 2001 Agreements that suggests that by way of some agency or otherwise Celador was to be denied any right to insist upon full contractual performance of any subsequent licence, such as the 2SA, which Celador, rather than ECM, should later grant.

(ii) Discussions in 2001

73. The nature of the discussions alleged is to be found in paragraphs 5.2-5.9 of Arief's Amended Reply and Defence to Counterclaim. They allege a full awareness in ECM of a situation in which Arief would require assistance in the production of WWTBAM and that it would be coming from RCTI and TVRI. It is said that the manner of the intended production involving those companies was fully explained to ECM at its meetings at the time with Arief, RCTI and TVRI. However, with one small exception I cannot see anything to suggest that discussions with ECM in 2001 were such as to be able to affect Celador's being able fully to rely upon the terms of the 2SA of the 28^th March 2002. ECM was not an agent of Celador but a licensee of Celador and I see nothing to carry knowledge in ECM on to Celador. The one small possible exception is that it is pleaded – paragraph 5.9 of the amended Reply and Defence to Counterclaim – that in July 2001 a Mr Tino Perez of T. Graphics – "an IT company engaged by [Celador]" – visited Jakarta to oversee the final stages of preparation for Arief's production of WWTBAM. He had, it is pleaded, such extensive contact with TVRI and RCTI as to make him aware of the rôles played in production by each party. However, I have had no evidence to show that whatever knowledge he acquired was transmitted to Celador. Moreover, what he saw was only preparations for production rather than actual production and, given that what he saw included work by employees of TVRI, it was plainly preparations for production of a kind different from that which actually later occurred, especially after the making of the RCTI Agreement, during the currency of the 2SA. I thus fail to see how the pleaded discussions and Mr Perez's visit in 2001 assist Arief.

Celador's witnesses and Waiver Part III

74. The subject of the third category of the facts upon which Arief relies as to waiver – see paragraph 69 above – is interwoven with the subjects which I earlier said I would deal with, namely the credibility of a number of Celador's witnesses and a look at some late stages of the chronology.
75. From the 8^th April 2002 and before, as early as at a meeting with Dato in February 2002, Celador knew that the exterior studio (as opposed to the studio-set) used for the broadcasts was to change (from TVRI's to RCTI's) and that in ordinary consequence the production staff would therefore change. On the 12^th April Kate Singleton of Celador was told that there would be a new production team. She said in oral evidence that she thought that the producer and some others would nonetheless remain the same. However, on the 19^th April Celador was told by Miss Nunung by e-mail that in the next production all staff would come from RCTI and Kate Singleton's e-mail of the 14^th May 2002 plainly indicated that she expected the producer to change as she then asked for the names of "the new Director Producer and computer operator so that we can update our records". No anxiety about any diminution in Arief's rôle was mentioned. When her fax was put to her she said that she wanted to know the names of the new staff in question "Should they have changed". Even if that had been intended, it would have shown an awareness of imminent change without any concern as to any change in Arief's rôle. Mr Livingstone, too, contemplated there being a new production team and had no problem with that. On the 15^th July 2002 Miss Nunung by e-mail sent Celador (Kate Singleton) a list of the names of the "key personnel of the new team" but, contrary to Arief's argument, I do not take the little box on the e-mail saying "KEY PERSONNEL RCTI1" as indicating that such personnel were all,or were all to be, employed by RCTI. "RCTI1" was a designation of the exterior studio to be used; it did not necessarily give an indication of the employer of the named personnel. I can accept Kate Singleton's evidence that she failed to notice a reference to RCTI as the employer.
76. In September 2002 arrangements were made for representatives of both Arief and RCTI to visit London to see a production of the UK version of WWTBAM. There was, on the 7^th September, an e-mail from Miss Nunung that, carefully read, suggested that those on the visit other than her and Jonathan Santoso were "production people from the station", meaning RCTI, but I regard the reference as far too cryptic, given that the e-mail was chiefly about travel and hotel arrangements, to bring to Kate Singleton's mind that Arief (as I am assuming) then no longer had or was to have any substantial part in production. The visit took place and business cards were exchanged but there was nothing surprising about employees of RCTI, it on any footing having an important activity as the broadcaster of the Series, taking part in the visit, as did Miss Banowati as the broadcaster's Executive Producer. Involvement of RCTI did not, of itself, suggest any lack of involvement by Arief nor, either, that Arief's rôle in production as a whole was less than it had been or less than due compliance with the 2SA required.
77. Whilst I do not see myself as greatly concerned with whatever was Celador's motive lying behind its decision not to renew the Arief licence, a good deal of evidence was directed to the subject including that the per-episode fee payable to Celador went up from $2200 payable by Arief to $13000 payable by Becker. However, an analysis of the later chronology does throw up the matters which relate to the credibility of Celador's witnesses. Thus as early as the 21^st January 2003 RCTI and Celador were in direct contact and Mr Spencer of Celador had told RCTI that Arief "Could not be evicted just because they are frequently not around and [are] poor communicators with RCTI". The use of the word "evicted" suggests that even as early as that date the involuntary removal of Arief was already a subject of some discussion between RCTI and Celador. I found the attempt by Mr Spencer, then Celador's Format Business Development Manager, otherwise to explain the word "evicted" to be unimpressive. At all events, on or about the 3^rd February 2003 Mr Watson, then Celador's Managing Director, received a telephone call from Daniel Resowijoyo of RCTI which, said Mr Watson, was a complaint to Celador that Arief was overcharging RCTI and that Arief had next to nothing to do with production of the show. Mr Watson's first witness statement says that he recalled that Mr Resowijoyo had said that $40,000 was being charged to RCTI but, remarkably, Mr Watson could not be sure that that was said to have been per episode. His first written evidence also tacitly suggested he was unsure whether he was then told that RCTI could not afford the charges being made. However, by the time he gave a second witness statement and oral evidence his evidence as to that telephone call included that Mr Resowijoyo had said that RCTI could not continue to afford WWTBAM. Mr Watson was, he said, "pretty incensed" on hearing that, though there is no evidence that he had by then (or, indeed, ever) established whether the sum that he had had mentioned to him was per episode or not.
78. He called a meeting of Celador's officers or employees on the 4^th February 2003. Celador had just learned that Arief was sending or had sent the deposit of $66,000 as the deposit required by the 2SA if there was to be an "evergreen" renewal and hence a Third Series. At short notice Mr Ellis Watson as Celador's Managing Director called a meeting which included Kate Singleton, Celador's International Production Supervisor, Victoria Fagan of Celador's "in-house" Legal Department, Graham Spencer and Connagh Maclean of Celador's financial staff. If nothing else were to do so, the timing and urgency of the meeting suggests that it was either for Mr Watson to announce, or for a discussion as to, the response to the request for a renewal into a Third Series. No minute of the meeting has been produced on the ground, specifically verified by Celador's Solicitors and Counsel, that the meeting was properly covered by legal professional privilege. I accept that verification but that of itself dents Mr Watson's credibility as his evidence gave no support for the meeting being either called in order that Celador should receive legal advice or that legal advice was given at it. He did not recall whether legal advice was given at the meeting. It is plain that Mr Watson, despite his evidence that he had at the time an open mind as to Arief's renewal, announced at that meeting (whether or not after discussion on the subject) that a detailed and urgent search was to be made in order to find grounds for not renewing Arief's licence and, moreover, that as far as possible the search should be conducted and reported upon without leaving a paper trail that would be disclosable should there be proceedings.
79. There is no reason why Celador should not quite openly have instituted such a search but Celador's witnesses showed an evasiveness or a remarkable lack of memory or reluctance to call to mind what plainly was an exceptional meeting and what were unusual instructions as to the searches to be made. By their unease in relation to details of the search and the attempts, by avoiding a paper trail, to deny or conceal it, they created for Celador a quite unnecessary rod for its own back which left wounds.
80. The search began at Celador for material to be used against Arief. It was, contrary to Celador's evidence, far from routine as an involuntary non-renewal was unknown territory for Celador. On the 5^th February Kate Singleton telephoned Daniel Resowijoyo of RCTI; she had plainly been commissioned to see whether all episodes of WWTBAM shown in Indonesia had been fully paid for by Arief. She had been told by Mr Resowijoyo of the existence of a document which said that RCTI would be responsible for production of the show (a reference presumably, though she did not know it at the time, to the RCTI Agreement). In reporting back to Mr Watson by inter-office e-mail what she had learned she added:-

"….. you did say that you wanted everything to be telephone conversation only …."

a reference explicable only by reference to the adoption of a policy, dictated or adopted by Mr Watson, to avoid the creation of disclosable material.

81. On the 6^th February 2003 Connagh Maclean e-mailed Kate Singleton on the subject of whether Celador had indeed been fully paid by Arief for what had been shown on television. The e-mail added:-

"This may be an area we can pick on. The only problem is, we have sent them an invoice for the excess amounts, which could be seen as us accepting the facts that they have run longer episodes. Whilst we have the details from RCTI, it may be worth bringing to Ellis' attention."

The fact that it was a "problem" that Arief had already been invoiced, the reference to "an area we can pick on" and of bringing the matter to Mr Watson's attention all support the conclusion to which I have referred as to the business of the 4^th February meeting. On the 7^th February Kate Singleton observed, in terms suggesting disappointment, that any complaint as to Arief not having adequately accounted for any excess showings might, in the circumstances " …. come across as a bit lame".

82. On the 10^th February 2003 Mr Watson e-mailed Kate Singleton and others saying, à propos an analysis of ratings received from RCTI as to showings of WWTBAM in Indonesia:-

"I need those schedules interpreted now (in the next 4 hours), as without a discrepancy we won't have grounds to brief and will be locked into the injustice of Arief forever."

Mr Watson was plainly and urgently hoping to light upon a good ground not to renew Arief's licence. His failure to accept that in his cross-examination, which included his belittling his own staff, was remarkable as to its equivocation and ineptness.

83. On the same day Kate Singleton replied that the schedules had been checked and that Arief had not been understating the duration of the programmes transmitted "…. as RCTI have accused them of doing". That should have suggested to Mr Watson that information he was getting from RCTI was not necessarily accurate.
84. Others than Mr Watson at the meeting of 4^th February sought to distance themselves from it by failing to recall any detail, although the involuntary non-renewal of a licence was, as I mentioned, a subject of real rarity for any meeting. Mr Spencer said he had no recollection of the meeting, nor could he explain the revealing references in the inter-office memoranda to which I have referred. He took no part, he said, in decisions as to the ending of Celador's relationship with Arief.
85. Miss Singleton accepted that Mr Watson "could have" said that he wanted nothing in writing but claimed not to remember. She had a quite implausible explanation of the e-mail as to an area "to pick on" claiming, quite improbably, that "we were really, really not looking to find holes". She could not explain how it was a "problem" if Arief had already been invoiced if Celador were not trying to find holes in Arief's position. She could not explain why a "discrepancy" had been searched for, nor the urgency of the search or the "injustice" referred to.
86. No evidence, oral or otherwise was given by Victoria Fagan or Connagh Maclean. As for those who were at the meeting on the 4^th February 2003 and who did give oral evidence, their respective accounts of what happened at the meeting and what happened in consequence of the meeting were such as to make each of them an unreliable witness. To some extent Mr Spencer and Miss Singleton might be forgiven for a misplaced loyalty to their boss, Mr Watson, above a due regard for the truth but in Mr Watson's case even that possible explanation is unavailable.
87. Continuing with the later chronology, Mr Becker, of the Australian television production company of that name, came to London on the 18^th February 2003 and met senior officers of Celador. He produced to them a letter to Becker from RCTI of the 11^th February 2003. The letter makes no mention at all of Arief overcharging RCTI, nor does the letter itself give any explanation of why, should RCTI have had a complaint about Arief, it should not complain directly to Celador or Arief. If, at the meeting, Mr Becker had said that Arief was overcharging RCTI and that that formed part of a complaint by RCTI about Arief (and I have no evidence from Mr Becker), there is no evidence that the message had truly originated from RCTI rather than from Mr Becker. One of Celador's men at the meeting could not remember whether Mr Becker had indicated that RCTI itself had raised such a complaint. The other gives no source for Becker's assertion. Nor does either of them, Mr Woolfe, now Celador's Managing Director, and Mr Smith, its Chairman, explain why it should have been that whilst RCTI was complaining, by its letter of the 11^th February, it failed, if it had a complaint as to overcharging, to mention that in the letter. Mr Smith had no figures as to what amounts the overcharging that was spoken of might represent. His oral evidence included that Mr Becker had explained to him at the meeting "….that there was also a concern at the level of costs that were being charged" but he sought no details, was given no details and had nothing before him to show that the complaint had truly originated with RCTI rather than with Mr Becker. Given that, as it transpired, a Becker company took over the licence a little later and that Becker had plainly been interested in doing so from the beginning of its contacts with Celador, one might have expected Celador, by its senior officers, to have explored, perhaps at first with RCTI but then with Arief itself, what sums were being required to be paid to Arief and whether they truly did jeopardise the future of the show, as became Celador's case. At no stage was any such inquiry ever made. RCTI's letter to Mr Becker which had been produced at the meeting of the 18^th February was then handed on to Mr Watson but, as it made no mention of overcharging, it alone cannot have excited in him concern on that point. It may well have been that Mr Woolfe or Mr Smith expressed concern to him on the subject but rather, it seems, than requiring Mr Watson to verify and examine into the complaints, they simply left further conduct entirely to him.
88. I mentioned in paragraph 9 that, concerned at the risk of Arief's licence not being renewed, a team from Arief flew to London and met Celador on 3^rd March 2003. The team included Dato. Arief's then-Solicitor also attended. In his witness statement Dato made no mention of his saying, in rebuttal to Mr Watson, Celador's Managing Director, at the meeting on the 3^rd March 2003 that Arief had not breached clause 15 of the 2SA, nor anything to suggest that Mr Watson had walked out of the meeting, though both such assertions were to be found in his oral evidence. This was said to reflect on his credibility. As to his having not denied breach of clause 15, I see no real significance in Dato not having mentioned it in his witness statement as it had from the outset been Arief's case that breach of clause 15 had been alleged by Celador at the 3^rd March meeting and that such breach was denied – paragraphs 11 and 12 of its Particulars of Claim. There was no change of tack. As for Mr Watson walking out (in one Dato version) or, in another, saying to Dato "Please go", it was not said by anyone that the meeting was cut peremptorily short and the manner in which the meeting ended was left unresolved. But there were some contentious features in the evidence as to the meeting, a meeting of which two separate contemporary notes were made.
89. Mr Watson asserts that at the meeting Dato admitted that Arief was charging RCTI for a service that it, Arief, did not fulfil, that Arief had nothing to do with the show and that Dato said that he thought that he had obtained permission to ensure that Arief could continue to do nothing (and yet, by implication, still retain and renew the licence).
90. Miss Victoria Fagan made a note of the meeting. It would have been remarkable had Celador's own in-house lawyer not noted important admissions or concessions from Dato on issues fundamental to Celador's obligation or not to renew the licence but her note makes no mention of anyone on Arief's side saying that Arief charged for a service which it did not fulfil or that Arief had nothing to do with the show or that Dato said that he had understood that he had had permission to continue to do nothing in relation to the show and yet could retain and renew the licence. Nor, contrary to Mr Watson's assertions as to what was said at the meeting, does Miss Fagan's note include any reference whatsoever to Mr Watson asserting that Arief was so overcharging RCTI as to endanger the long-term prospects of WWTBAM in Indonesia.
91. Ironically, the other note, one made by the solicitor then acting for Arief, was more helpful to Celador. Even so, the note does not substantiate Mr Watson's version of events. So far from Arief having accepted that it had nothing to do with the show, Dato is recorded as having asserted that "I have my own people on the floor" and that RCTI "were contractors only". Nor, according to the note, did Dato say that he had obtained some permission although he did, according this note, indicate that he had asked for it. Nor does this note include any record of Mr Watson asserting that so high were Arief's charges to RCTI that the longevity of the show was jeopardised. The significant differences between what Mr Watson asserted took place and what the notes record are, in my view, grounds for real doubts as to the reliability of Mr Watson's evidence.
92. Mr Watson did himself further disservice by asserting that one of the two reasons that had led him to decide not to renew Arief's licence was that he had found out from RCTI that Arief was charging RCTI so much per broadcast episode of WWTBAM as to have put the long term viability of the show in Indonesia into jeopardy. That was a reason that, as I have mentioned, had escaped the notice of Celador's note taker at the meeting of the 3^rd March 2003, was not mentioned in Celador's long and careful letter of the 7^th April 2003 (a letter plainly drafted upon legal advice) and which did not form part of Celador's Amended Defence and Counterclaim. I accept that overcharging RCTI could not be a breach of clause 15 but if it was to be asserted against Arief it would have been no more than just to warn Arief in the letter or in the pleading. The fact that no mention was made hardly underlines the likely veracity of the alleged overcharging issue as being a reason which Mr Watson had expressed as long ago as 3^rd March 2003 but there were further reasons for disbelieving that it was in Mr Watson's mind as a bona fide reason to contribute to the non-renewal.
93. No-one could have come to a bona fide and informed view as to such overcharging by reference only to knowledge of a fee payable per episode (even if Mr Watson could have been sure he had that) without needing also to establish who was receiving what monies deriving from the shows, including sums by way of premium call receipts, promotions, sponsorship and advertising, and what were the production and other related costs and by whom and in what amounts they were borne. Mr Watson had been told by RCTI, he said, albeit in a telephone call of which no note was disclosed (and not at a meeting, perhaps with Dato's family, perhaps with Mr Resowijoyo, as he had first suggested) that such was the overcharging that the long-term future was in jeopardy but he had at the time no other information on the point and he knew that RCTI had given inaccurate information to Celador as to Arief's not having fully accounted for such shows as had been broadcast. Despite that, he neither himself gathered the information necessary for an informed view nor commissioned others to seek it for him. In particular, he did not ask for such information from Arief and failed to do so despite his oral evidence that he would investigate and take very seriously any matter that put the long-term future of the show in jeopardy. At first he said that when he had had Dato in front of him on the 3^rd March 2003 he did not ask what sums Arief and RCTI respectively made from the show but then he claimed that his witness statement itself indicated that such a request had been made. No witness statement of his dealt with the point. Remarkably, he said that he took it from Dato's indicated willingness on 3^rd March, if necessary, to pay more for the licence for the Third Series than had been payable during the Second as of itself an indication that Arief was so overcharging RCTI as to jeopardise the future of the show. He went on to say that Arief had lied to Celador on a number of occasions, without identifying them, and he spoke of masquerade by Arief and of its "ill-gotten gains" without condescending to proof or detail. He spoke of the RCTI Agreement (which one might expect to have been acceptable to RCTI, a substantial production and broadcasting company, as an arm's length bargain agreed with Arief, an agreement as to which there is no evidence of prior complaint of RCTI to Arief) as a commercially unsound and corrupt relationship, most, if not all of those views being based, it seems, on the one un-minuted telephone call from RCTI. I am sorry to say that I found Mr Watson to be an unsatisfactory and untruthful witness.
94. It would have been easier to accept that Arief had been so seriously overcharging RCTI as to have jeopardised the future of WWTBAM in Indonesia had it been shown to me either that the show had not been profitable to RCTI or that, under the new agreement which, on the 21^st May 2003, emerged with Becker, RCTI had to pay significantly less than had been required under the Arief regime. Neither was proved to my satisfaction.
95. As for Celador's other witnesses, apart from their suffering from what Mr Kay rightly described as a collective (but, in my view, often simulated) amnesia as to the events of February and March 2003 (they preferring to leave it to Mr Watson in particular to deal with those events) their evidence was not impugned in ways which require separate mention.
96. I revert to the issue I have called "Waiver".
97. In Arief's extensive pleadings from paragraphs 5.10-6A of its Amended Reply and Defence to Counterclaim Arief sets out over several pages a series of allegations as to Celador's alleged awareness of Arief's lack of involvement in production. However, assuming, against my earlier findings, that Arief, during the currency of the 2SA and in particular after the RCTI agreement, had either no involvement at all or so little involvement in production as to represent a breach of what I have called the alienation provisions in the 2SA, then, despite my extensive misgivings about Celador's evidence, I do not find the allegations proved. The probability, in my judgment, is that it was not until Celador saw the RCTI Agreement, well after the decision not to renew Arief's licence, that Celador was truly aware what contractually was required of RCTI by Arief and even then they did not know precisely what was in fact done and not done in relation to production by Arief and RCTI respectively. Celador undoubtedly knew of the change of exterior studio from its being that of TVRI to that of RCTI. That had been made clear to Celador as early as February 2002, when Dato came to London and met Celador management. Celador would have known, too, of the probable consequent changes as, for example, to lighting, sound and camera equipment and personnel but, whilst Dato may have felt that he had explained and had obtained consent to, a broader alienation of production, I do not see that such knowledge that Celador then or thereafter acquired was knowledge of the wider involvement in production that the RCTI Agreement provided for. Nor is there material enabling me to hold that when the 2SA was made or later there emerged any assumption, common to Arief and Celador, that , without jeopardising renewal, Arief need take little or no part in production.
98. Celador can, in my judgment, rightly require, before it is to be taken to have lost the important right not to renew, that not some oblique reference or uncertain possibility should afflict it but something clear and unequivocal as to production proper being taken over by RCTI. There is nothing such. I do not find that any unawareness in Celador of the extent as to who was doing what in relation to production was attributable to any deliberate concealment or misleading by Arief. Rather it was because Celador, until renewal loomed and Becker showed interest, had been, if not indifferent, then at least uninquisitive so long as payment was duly made and the quality of the show, tapes of which were sent to Celador, was kept up, as it was. Had I had to decide the questions I have broadly labelled "Waiver", which I do not, and if, prima facie, Celador had acquired a right not to renew Arief's licence, then I would have held that nothing which is both alleged and proved had denied Celador that right.

Celador's Counterclaim

99. Although there is a counterclaim by Celador which is defended by Arief by way of Amended Reply and Defence to Counterclaim there was, to the best of my recollection, no mention of Celador's Counterclaim at any point during the hearing before me. I will need to be addressed as to whether any, and if so what, judgment is appropriate on the Counterclaim.

Conclusion

100. For the reasons I have given I find Celador liable to Arief; I answer each of the questions posed in paragraph 14 above in the negative. Celador had no sufficient reason to justify not renewing the "evergreen" 2SA. As I have been concerned only with liability then, as I mentioned earlier, there will thus need to be a separate hearing as to quantum should the parties not be able to agree terms.