IMAX seeks to enforce estimated $11 million unanimous arbitration award
against E-City Entertainment
TORONTO, Feb. 11 /PRNewswire-FirstCall/ - IMAX Corporation (NASDAQ: IMAX;
TSX: IMX) today announced that a Panel of the International Court of
Arbitration of the International Chamber of Commerce found unanimously in
favor of IMAX in an arbitration against E-City Entertainment (I) PVT Limited
("E-City"), and awarded Imax $9.4 million, plus interest and costs, which IMAX
believes will increase the award to in excess of $11 million in the aggregate.
The arbitration, which took place in London and included three separate
witness hearings and extensive legal briefing, involved an agreement under
which IMAX awarded E-City rights to develop a minimum of six IMAX(R) theatres
in India. E-City subsequently claimed that the agreement was a non-binding
term sheet, that the amount of damages that IMAX was seeking for lost profits
was excessive and that IMAX had failed to mitigate its damages. The Panel
found that the agreement was fully enforceable, that E-City had breached its
obligations under that agreement and awarded IMAX all of the lost profits that
it sought under the agreement.
E-City is affiliated with India's Essel Group, a conglomerate best known
for its worldwide Zee TV television network and headed by the well-known
Indian industrialist Subhash Chandra. E-City operates movie theatres as part
of entertainment centers throughout India under the names "Funcinemas" or
"Fun-Republic."
The parties' agreement provided for binging ICC arbitration of all
disputes. The Panel was composed of three distinguished practicioners: Arthur
Marriott, Q.C. of the London office of the LeBeouf Lamb law firm, Professor
Errol Mendes of the University of Ottawa and M.L. Bhakta, a prominent
solicitor from Mumbai. The Panel's Award was unanimous in favor of IMAX. If
E-City does not voluntarily pay the Award, IMAX intends to commence
enforcement proceedings against E-City's assets.
IMAX was represented in the arbitration by Jonathan Cooperman of Kelley
Drye & Warren LLP.
About IMAX Corporation
IMAX Corporation is one of the world's leading digital entertainment and
technology companies. The worldwide IMAX network is among the most important
and successful theatrical distribution platforms for major event Hollywood
films around the globe, with IMAX theatres delivering the world's best
cinematic presentations using proprietary IMAX, IMAX(R) 3D, and IMAX DMR(R)
technology. IMAX DMR is the Company's groundbreaking digital remastering
technology that allows it to digitally transform virtually any conventional
motion picture into the unparalleled image and sound quality of The IMAX
Experience(R). IMAX's renowned projectors and new digital systems display
crystal-clear images on the world's biggest screens. The digital system being
developed by IMAX is configured for an IMAX MPX-style auditorium, which is
designed specifically to enable multiplex operators to more cost effectively
enter into the IMAX theatre business. The IMAX brand is recognized throughout
the world for extraordinary and immersive entertainment experiences for
consumers. As of September 30, 2007, there were 296 IMAX theatres operating in
40 countries.
IMAX(R), IMAX(R) 3D, IMAX DMR(R), IMAX MPX(R), and The IMAX Experience(R)
are trademarks of IMAX Corporation. More information on the Company can be
found at www.imax.com.
This press release contains forward looking statements that are based on
IMAX management's assumptions and existing information and involve certain
risks and uncertainties which could cause actual results to differ materially
from future results expressed or implied by such forward looking statements.
Important factors that could affect these statements include ongoing
discussions with the SEC and OSC relating to their ongoing inquiries and the
Company's financial reporting and accounting, the timing of theatre system
deliveries, the mix of theatre systems shipped, the timing of the recognition
of revenues and expenses on film production and distribution agreements, the
performance of films, the viability of new businesses and products, risks
arising from potential material weaknesses in internal control over financial
reporting and fluctuations in foreign currency and in the large format and
general commercial exhibition market. These factors and other risks and
uncertainties are discussed in IMAX's Annual Report on Form 10-K/A for the
year ended December 31, 2006, as well as IMAX's Quarterly Reports on Form
10-Q/A and Form 10-Q.
SOURCE IMAX Corporation
Media: IMAX Corporation, New York, Sarah Gormley, (212) 821-0155,
sgormley@imax.com; Entertainment Media: Newman & Company, Los Angeles, Al
Newman, (310) 278-1560, asn@newman-co.com; Investors: Integrated Corporate
Relations, Amanda Mullin, (203) 682-8243; Business Media: Sloane & Company,
New York, Whit Clay, (212) 446-1864, wclay@sloanepr.com
