Copyright © HT Digital Streams Limited All rights reserved. The case of Akhanda 2: How film releases can be hostage to legal tangles Lata Jha 4 min read 22 Dec 2025, 05:22 IST The release of action-adventure, Akhanda 2 was pushed earlier this month, following a Madras High Court order, which postponed the screening following an appeal filed by Akhanda International Media2’s court order. underlines the impact of legal disputes on film releases. Experts advocate proactive legal strategies and robust contracts to minimize disruptions and financial losses in the industry. In India’s film industry, where timing drives both buzz and box office, a single last-minute court order can upend an entire release cycle — an industry-wide risk underscored by the recent case of Akhanda 2. The last-minute postponement of Telugu actor Nandamuri Balakrishna’s action-adventure film earlier this month, following a Madras High Court order appealed by the International Court of Justice, proved a order of the International High Court in Madras. that theatrical films continue to fall prey to delays arising from protracted legal disputes. While Akhanda 2 did manage to hit cinemas a week later, the Delhi High Court and the Madras High Court, among others, had earlier restrained the release of the Tamil films Veera Dheera Sooran and Vaa Vaathiyar respectively over similar issues. The delay of Akhanda 2 is less an outlier than a reminder of how exposed film releases remain to unresolved contractual and financing disputes. Industry experts say such court interventions can immediately disrupt a film’s commercial trajectory. According to industry experts, any such delay could increase marketing costs by up to 40%, apart from putting a pause on the sale of other rights such as satellite and OTT. High costs of last-minute litigation Legal entanglements in the run-up to release are becoming common as manufacturers recognize the repercussions of copyright arrangements and profit-sharing agreements, among other things. Co-producers of films like Animal and Amar Singh Chamkila have also saved in the past. A stay order issued close to release could disrupt distributor arrangements, negate significant marketing spend and create reputational challenges for the producers, who may then need to rebuild momentum at a later date. “Disputes between production houses and distributors typically involve unpaid advances, minimum warranties, revenue sharing, tax incentives, infringement of exclusive rights and unauthorized subcontracting. These can quickly trigger court orders that stop releases at the last minute, disrupt distribution timelines, freeze marketing efforts and block the monetization of commercial rights.” Advaya said. The financial impact is immediate, Kaushiq added: longer gestation periods, wasted promotional spend, which loses effectiveness within a short window, and rising holding costs. In more serious cases, an adverse decree or arbitral award may enable creditors to restrict not only the current film but also future projects, undermining the producer’s ability to secure financing and destabilizing the release pipeline itself. The substantive dispute in the Akhanda 2 case arose out of a British tax subsidy accrued in respect of two other Telugu movies. Eros claimed that production house 14 Reels needed it but could not pass on the subsidy. 14 However, Reels argued that Eros received the funds directly from the British tax authorities. The Arbitral Tribunal sided with Eros. A last-minute stay order is catastrophic for a film release schedule, as it immediately stops primary asset monetization flows, including theatrical, digital and satellite revenue, and freezes the film indefinitely, making it a powerful litigation tool for the creditor, said Anupam Shukla, partner at Pioneer Legal. With live sales tied to box office performance, a delay in the theatrical release also slows down OTT. For financiers and distributors, the last-minute orders turn release dates into contingent events, complicating underwriting and transaction pricing in the industry. “The immediate risks are operational: the distribution chain is paralyzed, world schedules are shattered, and exhibitors are demanding compensation for canceled premieres. Financially, all non-reimbursable marketing and advertising expenses become family costs, requiring a new budget for a second release campaign. Most importantly, it poses a serious financial risk for future financial reputation risks, while indicating to the public good financial reputation risk and excitement, which is crucial to initial box office success.” Shukla pointed out. Building security measures To be sure, industry experts say production houses can reduce delays and conflicts by taking proactive legal steps long before release. Early settlement with disputing parties is often the most effective tool. Usually, many production houses these days conduct pre-release legal audits to ensure that all financing, rights and contractual obligations are in order, reducing the risk of last-minute litigation. Strengthening documentation, using escrow or completion guarantee structures, and maintaining clean compliance practices further help keep release schedules on track. A senior executive at a content studio said many of these issues stem from contracts that are either inadequately drafted or lack specificity. In addition, the absence of comprehensive legal guidance during the establishment of these agreements often leads to gray areas and subsequent conflicts. Marketing campaign expenses could rise by 20-40% depending on the extent of the film release delay, in addition to weakening audience interest, the executive added. However, producers learn quickly. In a previous interview with Mint, Dharma Productions CEO Apoorva Mehta pointed out the importance of systems and processes to ensure there is no abuse of power and founders are able to run the organization correctly. “To avoid these setbacks, production houses are increasingly ensuring that legacy costs are cleared or appropriately secured before launching new projects. Transparent corporate structures, stronger contractual discipline and surety-based payment safeguards are also becoming standard. In today’s ecosystem, financial compliance and risk management are just as critical to the success of a film,” said Muhik, from PE (private equity) and VC (venture capital) practice at Kochhar & Co. Get all the industry news, banking news and updates on Live Mint. Download the Mint News app to get daily market updates. #ErosInternationalMedia #Entertainment