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Inside the court ruling that ordered MTN to pay shs1bn to Proline for violation of players’ image rights

Kampala, (UG):- Last week, the Commercial Court in Kampala directed MTN Uganda to pay UGX 1,015,668,000 in general damages and interest to Pro-Line Soccer Academy Limited for the violation of the image rights of  Uganda Crane players, that the telco used in a marketing campaign between 2007 and 2008.

Pro-Line Soccer Academy Limited, a sports promotion and development organisation in Kampala in its suit (Civil Suit No. 0317 of 2011) sued MTN UGANDA LIMITED, its then advertising agency, QG Saatchi & Saatchi as well as the Federation of Uganda Football Associations (FUFA) Limited for breach of contract. 

Pro-Line Soccer Academy Limited contended that by an agreement dated 4th July 2007 between it and eight national soccer team members, the “Uganda Cranes,” it was authorised to enlist contracts for commercial use of their images at a negotiated consideration. Subsequently, by an agreement dated 7th September 2007 between it and M/s QG Saatchi & Saatchi, it undertook to procure eleven members of the “Uganda Cranes,” to pose for a series of photoshoots to be used exclusively in advertising and promotional activities for MTN Uganda, for one year, expiring on the 8th of September, 2008.

It was agreed that for the image rights of the eleven team members of the “Uganda Cranes” the telco would pay the sports company UGX114,120,000. This included free MTN air time worth a total of UGX 21,120,000/= to be availed to the participating team members for the duration of the contract.

However, upon the expiry of the contract, MTN continued to use the images in its advertising and promotional without the consent of the sports company which” constitutes an infringement of the image rights vested in it by the eleven “Uganda Cranes” team members”. 

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The sports company then sued the telco, its advertising agency as well as FUFA, seeking the recovery of UGX342,360,000/= for that violation for the period commencing from 8th September 2007 to 8th September 2011 and general damages for the period thereafter until the stoppage of the infringement, general damages for breach of contract, interest and costs.

Mujib Kasule, the director of Proline Soccer Academy

MTN Defends self

In its defence MTN’s lawyers, M/s Kampala Associated Advocates submitted that the Proline Soccer Academy lacks locus standi (legal basis or capacity to sue), since image rights are in their nature personal rights and were indeed assigned to MTN through their agency- QG Saatchi & Saatchi, by the participating “Uganda Cranes” team members and not the Proline Soccer Academy. 

MTN also pleaded that they were not bound by the contract between the sports company and their advertising agency as they were not party to the said contract.

Moreover, the telco argued that since May 2007 it had a sponsorship arrangement with the Federation of Uganda Football Associations (FUFA), by which the federation granted it rights to feature images of team members, individually or as a team, of the “Uganda Cranes,” in its advertising and promotional activities.

The players in the contract included; Onyango Denis, Masaaba Simeon, Kizito Nestroy, Ibra Sekajja, Noah Kasule, Wagaluka Dan, Masa Geoffrey, Serunuuma Geoffrey and Obua David.  

By that agreement, MTN argued that it obtained property in the images and their use had not violated any rights of the sports company. It further argued that whatever promotional material Proline Soccer Academy is complaining of, was duly generated and used in accordance with the sponsorship arrangement it has with FUFA. It is only QG Saatchi & Saatchi against which Proline Soccer Academy may lay a claim for breach of contract.

QG Saatchi & Saatchi on the other hand argued that its position as an MTN agency ceased upon the expiry of the contract on 7th September 2007 and that if the telco continued using the advertising material it generated during the existence of the contract, then the claim is only maintainable against MTN Uganda.

QG Saatchi & Saatchi also said that it served as an agent of MTN Uganda for only one year and had no obligation to cause MTN Uganda to renew the contract once it expired.

FUFA in its defence denied liability under the contract of 7th September 2007 between Proline Soccer Academy and QG Saatchi & Saatchi on which the suit is founded, saying it wasn’t privy to that contract. It argued that by its position as the national institution responsible for the development, management and regulation of the game of soccer in Uganda, it has the mandate to organise international matches for the “Uganda Cranes,” by which it has rights to the images of the individual players as a national team.

It also argued that it is not true that Proline Soccer Academy has image rights in any four or more players donning the attire for the national team. Lastly, it also argued that the contract between it and MTN Uganda for the sponsorship of the Uganda Cranes, was different from that, that MTN Uganda had with Proline Soccer Academy and it therefore had no obligation to indemnify MTN Uganda for obligations arising under the latter agreement that it was not party too.

The Ruling

Delivering his judgement on 2nd February 2024, Justice Stephen Mubiru agreed with  Proline Soccer Academy that indeed it had the rights to execute the contract dated 7th September 2007 with M/S QG Saatchi & Saatchi, based on another contract that the sports company had signed with nine of the eleven players, on 4th July 2007.

“The wording of that agreement constitutes Proline Soccer Academy as a licensee of the images of the nine signatories. The nine players granted Proline Soccer Academy the right to put their images to commercial use for their benefit. It is common sense that image rights are protected as personal rights and, therefore are non-transferable to a new owner, i.e. their ownership is an immutable condition that protects the player’s image as a human right, and it is not possible to waive a personal right. The possibility to license image rights rests in their property aspect. The player, as the absolute owner of his image, can license a company, a third person, or a club to exploit their image, thereby consenting through an image rights licensing agreement such as this,” Justice Mubiru found. 

The court also found that by virtue of the image rights assigned to Proline Soccer Academy, it had the rights to sue (locus stands). 

Court also agreed with QG Saatchi & Saatchi that although it was initially the MTN agent, this relationship stopped on 8th September 2008 and beyond that QG Saatchi & Saatchi couldn’t be held liable for the use of the material it generated for the use by MTN Uganda in its marketing and promotion activities.

“The suit against QG Saatchi & Saatchi is entirely misconceived. For that reason Proline Soccer Academy’s suit against QG Saatchi & Saatchi is dismissed with costs to M/S QG Saatchi & Saatchi,” Justice Stephen Mubiru ordered. 

The court also dismissed MTN’s claims that the sponsorship of FUFA allowed it to use images of Uganda Cranes players as those image rights are the exclusive rights of the respective players and in the instant case, those rights had been assigned to to Proline Soccer Academy as the exclusive agent of the players.

“Proline Soccer Academy has proved the violation by MTN Uganda of the image rights licensed to it by the 11 participating players which entitles it to a number of reliefs,” the judge observed.

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“MTN Uganda therefore for a period of five years, in violation of the image rights, used the images which had been exclusively licensed to Proline Soccer Academy in circumstances where it is reasonable to estimate that it would have had to pay Proline Soccer Academy at the rate that had been negotiated under the expired contract, had it been granted an extension of that agreement to commercially use and exploit the sports image rights for that duration. Proline Soccer Academy is accordingly awarded a sum of UGX570,600,000/= as general damages.

“Proline Soccer Academy is accordingly awarded interest on the decretal sum at the rate of 6% per annum, from the date of filing the suit, i.e. 6th September 2011 until payment in full,” Justice Mubiru further ruled.

For the 13 years, interest on the awarded sum is over UGX445,068,000. Proline will however have to pay the costs of the suit to QG Saatchi & Saatchi.

This story first appeared on the CEO Magazine website on Wednesday, February 07, 2024, via this link.

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