Azerbaijani company files a multi-million lawsuit against world's largest music holding

The case may become the largest between legal rights holders in the CIS region

Baku. 26 May. REPORT.AZ/ The Azerbaijani company Omnikomo Music Group (Omnikomo) sues the world's largest music company Universal Music Group (UMG). 

Report informs, a suit for $ 25 mln was filed in the Great Britain.

Omnikomo provided facts on the basis of which it became clear that the company in 2012 acquired an exclusive license to distribute and reproduce Universal Music Group products on all media in Azerbaijan and Georgia.The rights were acquired on the basis of a licensing agreement with Universal Music Russia company, subsidiary of UMG. But at the end of 2013, due to non-fulfillment of a number of artciles of the agreement by the Russian side, UMG management decided to re-sign the license agreement with Omnikomo on behalf of the parent company, Universal Music Group Recording Services Inc.

So, based on the facts provided, it turns out that the UMG deliberately concealed and did not pay to the Azerbaijani company revenues from agreements concluded with global players such as Apple and Google and does not allow the Azerbaijani side to conduct a timely audit of these revenues so far.

In addition, for the purpose of illegal enrichment high-ranking UMG employees required to make part of the payments to their personal accounts within the framework of proposed services. When Omnikomo reported similar behavior of the company's employees to UMG chief executive Jeff Harleston, instead of conducting an investigation, finding and punishing those who responsible, UMG has offered to pay monetary compensation for concealing and not disclosing the fact of such behavior on the part of its employees and to destroy documentary evidences.

For a detailed study of terms of the contract between the two companies, Omnikomo attracted international consultants, conclusion of which showed that UMG does not own the rights to a significant share of the catalog that company sells to its partners.”This calls into question not only the cleanliness of the relationship between UMG and Omnikomo, but also with all partners around the world. Upon request to provide proof of rights to the catalogs, UMG lawyers from Sidley Austin responded with a sharp refusal. Moreover, the contract on behalf of UMG was signed by a person who is not authorized to sign such contracts on behalf of UMG", Omnikomo lawyers said.

Based on studied materials, Omnikomo management decided to forward the lawsuits to the court. Despite the fact that the contract was signed directly between Azerbaijani and American companies, English courts were chosen for the settlement of disputes under terms of the agreement.

Omnikomo is represented by lawyer Laura Arnold, and Universal Music Group is represented by lawyer Ransom Rollin.

Omnikomo also called on its partners and all interested parties to keep abreast of the developments in this case, and on all matters to contact [email protected].

Notably, Omnikomo Music Group was established in 2012 and acquired an exclusive license to distribute and reproduce Universal Music Group products on all media in Azerbaijan and Georgia.The company interacts with mobile operators, advertising agencies, TV and radio channels in the fight against illegal distribution of content both in Azerbaijan and Georgia.

Universal Music Group is the world's largest business company and a subsidiary of record labels, media holding. The company is owned by the French media conglomerate Vivendi SA, the most influential among the "big four recording labels".