NCLT Admits World’s Largest Fantasy Sports Platform’s Owner For Insolvency Resolution

India’s National Company Law Tribunal (NCLT) recently admitted Sporta Technologies Private Ltd., which owns Dream11 fantasy sports platform, into corporate insolvency resolution process (CIRP).

The Mumbai bench of the NCLT, comprising Judicial Member Reeta Kohli and Technical Member Madhu Sinha, passed the order on 9 February, the tribunal order showed.

The development came after Sporta’s bankrupt operational creditor Reward Business Solutions Private Ltd. filed an insolvency petition against the sports technology company in June 2021 under Section 9 of the Insolvency and Bankruptcy Code (IBC).

The petition against Sporta, which claims it operates the world’s largest fantasy sports platform Dream11, was filed by Reward’s Resolution Professional Piyush Jani to recover an operational debt of 7.61 crore rupees ($916,845).

Dream11 -- which allows people to play sports like cricket, football and kabaddi -- has more than 20 crore registered users on its platform, according to its website.

NCLT FINDINGS

The examination of submissions of both the parties and particularly, the lease and license agreement dated 27 December 2019, shows that Sporta had financial obligations toward Reward that the company failed to comply with, the NCLT said in its order. There is no dispute in relation to the same and the financial liability has also been admitted by Sporta, it noted.

“In view of the fact that the corporate debtor has already acknowledged its liability, it cannot be permitted to take undue advantage by withholding the license payment purely on the ground of whom it should have been paid to,” the tribunal said.

The NCLT said given the peculiar facts of the case, Sporta chose not to fulfil its financial obligations even after the issuance of the demand notice by Reward in April 2021.

“Thus, it is concluded that the company petition satisfies all legal requirements for admission including the pecuniary, territorial and subject matter jurisdiction and the same is also filed well within the limitation period of three years. Considering the above facts, we are of the considered view that this petition deserves to be admitted under Section 9 of the code,” the NCLT said.

The tribunal also appointed Madan Bajrang Lal Vaishnawa as an interim resolution professional for Sporta.

SUBMIT CLAIMS

Meanwhile, Vaishnawa asked Sporta’s creditors to submit their claims with proof by 26 February, according to a public announcement.

The e-mail to be used for correspondence with the IRP is cirpsportatech@gmail.com, he added.

Sporta’s CIRP is likely to be completed by 10 August, according to the announcement.

$1 = 83.002 Indian rupees

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