KUALA LUMPUR, Dec 10 — The dispute over the use of satellite dish technology by Astro media unit Measat Broadcast Network Systems Sdn Bhd (MBNS) will go to arbitration, the High Court here decided today.
Judge Azahar Mohamed today granted a stay of proceedings pending arbitration, reasoning that the prior agreement between plaintiff AV Asia Sdn Bhd and MBNS to refer all disputes to arbitration had to be respected.
He disagreed with AV Asia’s contention that the case should go through a normal court hearing due to the lack of an arbitration agreement between the television support equipment provider, MBNS and second defendant Tele System Electronic Sdn Bhd.
“Since the plaintiff and first defendant have mutually agreed to refer all disputes arising from the MNDA (mutual non-disclosure agreement), it must be respected,” Azahar said.
The judge also fixed January 26 for Tele System Electronic’s application to strike out the suit and AV Asia’s injunction application against the two defendants from using its confidential information pertaining to the Astro B.yond high-definition (HD) product.
The RM1.34 billion lawsuit was filed in September against Ananda Krishnan’s Astro subsidiary for breaching a “non-disclosure agreement” pertaining to the use of rain fade technology in the satellite television operator’s B.yond satellite dish.
The suit was filed by AV Asia against MBNS which enjoys an exclusive licence for satellite transmission.
AV Asia claims in its suit that MBNS had breached a mutual non-disclosure agreement with the private company over its technology to reduce rain fade.
Rain fade refers to the absorption of satellite or radio signals by rain or snow. Astro’s signals are frequently interrupted by rain.
AV Asia’s injunction against MBNS and Tele System Electronic, which was filed on October 27, sought to restrain MBNS from supplying satellite dishes that relied on such confidential information in their manufacture to its customers.
The injunction further asked the court to bar Tele System Electronic from using any confidential information supplied by AV Asia to MBNS under the mutual non-disclosure agreement between the two dated August 1, 2008.
An Astro spokesman had responded to the allegations by saying that the HD service has been available since last December and “the alleged use of confidential information is incorrect and strongly denied”.
In its preceding suit, AV Asia claimed MBNS had divulged confidential information to Tele System Electronic which the latter used to design and test MBNS’s satellite dishes.
The television support equipment provider also said that these dishes were almost identical to its satellite dishes.
AV Asia had said that in May 2008, the Malaysian Communications and Multimedia Commission (MCMC) had recommended MBNS to conduct studies on the use of satellite dish size and design to reduce rain fade problems.
In June 2008, AV Asia requested a Japanese company, Maspro, to conduct research and development to develop a satellite dish with reduced susceptibility to rain fade for the Malaysian market.
Maspro is involved in the manufacture, sale and construction of television reception equipment, antennas, satellite receivers and communication devices, among others.
AV Asia and MBNS then executed a mutual non-disclosure agreement dated August 1, 2008 related to the exchange of confidential information.
In February last year, MBNS subsequently told AV Asia that it would issue a purchase order to AV Asia upon the latter signing MBNS’s standard vendor contract.
AV Asia claimed that in May 2009, MBNS instead invited bidders to submit tenders to supply satellite dishes to it that were similar to the one in the non-disclosure agreement.
It further claimed that MBNS disclosed certain confidential information to bidders in its second tender exercise in July last year.
According to AV Asia, MBNS’s customers did not have to install a new satellite dish to receive HD transmission, and that this information was withheld by MBNS from its customers.
Instead, it claimed that the Astro B.yond HD product required consumers to install both a new decoder and satellite dish to receive HD programmes, at an added premium of RM20 monthly.
AV Asia is seeking damages for loss of profit as a result of being unable to commercialise its satellite dish amounting to RM1.34 billion and damages for research and development costs totalling RM4.4 million.
