Sands judgment: E411 053 royalties spark SA court battle

MBABANE – A dispute over E411 053.80 in outstanding music royalties resulted in separate court proceedings in South Africa involving a company associated with entertainment promoter Phila Dlamini.

This emerged in a High Court judgment delivered on Thursday in a copyright dispute involving award-winning musician Sandziso Matsebula, popularly known as Sands, ICON PB (Pty) Ltd and Kingdom Tales (Pty) Ltd.

Sands emerged victorious in the High Court copyright dispute involving his debut album, Sands of Time. The High Court dismissed, with costs, an application by ICON PB (Pty) Ltd, a company associated with the entertainment promoter, Dlamini, which sought to be declared the owner of the album’s master recordings. High Court Judge Cyril Maphanga ruled that the company had failed to establish a lawful claim to the copyright in the recordings, despite relying on an alleged agreement reached during the early stages of the musician’s career.

The company had also sought an order preventing Sands and Kingdom Tales (Pty) Ltd, the second respondent, from using or deriving any benefit from the album’s master recordings.

However, the court found that ICON PB had not demonstrated that the musician had transferred the relevant copyright to the company through a written agreement signed by him or his authorised agent.

The judgment brought to an end the High Court application arising from a dispute over the ownership of recordings produced during Sands’ early career. Sands was represented by Bahle Nkonyane of Magagula and Hlophe Attorneys. In the judgment, Judge Maphanga disclosed that ICON PB had instituted proceedings against Content Connect Africa in the Johannesburg High Court in 2019. The proceedings followed disagreements over royalties arising from the distribution of Sands’ debut album, Sands of Time, and questions concerning the ownership of the music.

According to the judgment, ICON PB had entered into a distribution agreement with Content Connect Africa following the release of the album. The arrangement allowed Content Connect Africa to distribute the music through its established network. Under the agreement, Content Connect Africa collected revenue generated from the distribution of the album and was required to account to ICON PB.The court records show that the distributor collected E483 953.80 in gross revenue from the distribution of the album.

Of this amount, E72 900 was paid to ICON PB. The payment represented approximately 15.1 per cent of the gross revenue recorded in the judgment. The remaining E411 053.80 subsequently became the subject of a payment dispute between the two companies.

ICON PB instituted proceedings in the Johannesburg High Court under Case No. 11981/19, seeking payment of the outstanding amount. The company also sought interest and legal costs.

However, the distribution company disputed ICON PB’s entitlement to the money. According to the judgment, Content Connect Africa maintained that the dispute over ownership of the album’s intellectual property rights affected ICON PB’s claim to the royalties.

Entertainment promoter Phila Dlamini, whose company lost the case against Matsebula.

The distributor argued that Sands, as the original author of the music, had a direct interest in the proceedings. It consequently raised a special plea of non-joinder, contending that the musician should be included in the litigation because the outcome could affect his rights. The judgment states that Content Connect Africa questioned whether ICON PB had lawful authority to claim licensing fees arising from the distribution and use of the music. The company also challenged ICON PB’s assertion that it owned and controlled the intellectual property rights in the recordings. These questions formed part of the dispute that led to the termination of the distribution agreement. In correspondence referred to in the judgment, Content Connect Africa maintained that ICON PB had warranted that it possessed the necessary rights to licence the recordings. The distributor said questions had subsequently arisen concerning the ownership of those rights.

It also raised concerns about the company’s compliance with its contractual obligations.

According to the High Court judgment, Content Connect Africa had alleged breaches of the distribution agreement and had relied on those alleged breaches when terminating the arrangement.

The court did not make a finding that ICON PB had committed those alleged contractual breaches. Judge Maphanga considered the South African proceedings because they involved questions similar to those raised in the Eswatini copyright application. He observed that ICON PB’s claim for outstanding royalties depended, in part, on its assertion that it was entitled to exploit the intellectual property rights in Sands’ recordings. The judge also noted that the company had relied on its claimed ownership of the recordings when responding to the distributor’s objections. The Johannesburg proceedings were, therefore, relevant to understanding the circumstances surrounding the dispute over the album. However, the Eswatini High Court did not determine whether the outstanding royalties were payable to ICON PB, Sands or another party. Neither did the judgment establish the final outcome of the Johannesburg proceedings. The E411 053.80 remained the amount claimed in the South African litigation as recorded in the Eswatini judgment, rather than a sum awarded by the Eswatini High Court.

Bahle Nkonyane of Magagula and Hlophe Attorneys.

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