Celador has lost a court battle that could cost it millions. Naomi Rovnick examines the case.
Celador has lost a court battle that could cost it millions. Naomi Rovnick examines the case.

celador, the maker of Who Wants to be a Millionaire?, is no stranger to courtroom drama after the trial in April last year of the cheating major and his wife, who attempted to cough their way to the £1m prize.

But while the tabloids were feasting on the news that Charles and Diana Ingram had been found guilty of fraud, Celador was about to enter a much lower profile legal clash that could turn out to be far more costly.

Celador's distribution arm, Celador International, has been hit with a $40m (£23m) damages claim after losing a high court case brought by Arief, the Indonesian former producer of Who Wants to be a Millionaire?, in May 2003.

It arose after Celador broke its contract with Arief, giving the licence to make Millionaire in Indonesia to Australian company Becker, which paid five times as much for the show. Arief responded with a high court writ and, on 28 May, the judge found in the complainant's favour.

The judgment is a tale of double-dealing, covered-up paper trails, and of how Celador tried every means possible to find a reason to justify not renewing Arief's licence.

It also heavily criticises one Celador executive, former international managing director Ellis Watson - now general manager of Mirror Group Newspapers - as an "untrustworthy" witness. He, along with two of his staff, are accused of suffering "collective amnesia" on the witness stand.

The judge slammed Celador for breaking its deal with Arief, which would have netted

the company a maximum of $144,400 (£78,600) annually, for its deal with Becker, worth $676,000 (£368,000) a year.

According to the judge, Celador had no right to break the original contract and "scratched around" to find a reason to give Arief as to why its contract had not been renewed.

On 4 February 2003 Watson called a meeting to start "a detailed and urgent search... to find grounds for not renewing Arief's licence", the judge reported. He continued: "Watson said the search could be conducted and reported upon without leaving a paper trail that would be disclosable should there be [court] proceedings."

Celador International executive Jane Singleton was tasked with finding evidence of how Arief may have possibly breached the contract. Watson and Singleton considered accusing Arief of producing too many episodes of the show.

"This may be an area we can pick on," an email sent by Singleton to Watson, produced in court, read. Although it conceded the tactic "may come across as a bit lame". Watson replied that a problem needed to be found, "as without a discrepancy we won't have grounds to brief and will be locked into the injustice of Arief forever".

The judge criticised Watson for a "failure to accept" he had been "plainly and urgently hoping to light upon a good ground not to renew Arief's licence".

As more indies prepare to take greater ownership of their rights and examine the potential for overseas sales, the Celador court case could be a salutary lesson.

The company now faces a similar action from Kenyan company, Shamesal Enterprises, which produced Kenya's version of the show until Celador pulled the plug in January 2003.

Shamesal has contacted Arief's lawyers, Harbottle & Lewis, to sue Celador International for wrongfully terminating its licence.

A Celador spokeswoman said the company will appeal the Arief judgment and that the amount of damages demanded was "speculative and grossly inflated". She added there was no certainty the Kenyan case would get to court.

Celador is due back in court in October when the judge in the case will decide whether the £23m damages claim is fanciful or realistic.