Sony Group Fails To Get Interim Relief Against Zee From SIAC

Zee says SIAC determined that emergency arbitrator has no authority to prevent Zee from approaching NCLT to implement the scrapped merger scheme
Sony Group Fails To Get Interim Relief Against Zee From SIAC

Sony Group’s Indian units failed to get an interim relief from the Singapore International Arbitration Centre (SIAC) in the legal fight against Zee Entertainment Enterprises Ltd. in the scrapped merger deal worth $10 billion.

The emergency arbitrator passed an award, denying the application for emergency interim relief filed by Sony Group’s units Culver Max Entertainment Private Ltd. (formerly known as Sony Pictures Networks India Private Ltd.) and Bangla Entertainment Private Ltd. on 4 February, Zee said in a stock exchange announcement.

The Indian media and entertainment company said the SIAC also determined that the emergency arbitrator has no jurisdiction or authority to prevent Zee from approaching India’s National Company Law Tribunal (NCLT) to implement their merger scheme since these matters fall within the statutory system and are for the NCLT to decide.

Sony Group’s units, after scrapping their proposed merger with Zee, had invoked the arbitration clause and moved the SIAC, seeking its intervention to restrain Zee Managing Director and Chief Executive Officer Punit Goenka and others from approaching the NCLT to seek direction on the implementation of the proposed merger.

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Culver Max and Bangla Entertainment terminated the merger deal in January and sought a termination fee of $90 million from Zee alleging the company breached the terms of the agreement signed in December 2021.

Following this, Zee also initiated legal proceedings to contest against Sony Group's claims in Singapore as well as approached the NCLT to implement the scrapped merger deal with the Japanese conglomerate’s Indian units.

The parties will likely now propose the names of arbitrators for the initiation of arbitration in the case.

Also, in the coming week, the Mumbai bench of the NCLT is expected to hear the Zee’s application, seeking direction to implement the merger scheme.

Zee and Sony Group in December 2021 signed definitive agreements to merge their businesses. The proposal earlier received approvals from the NSE, BSE and Zee shareholders. The Competition Commission of India also approved the merger with modifications. However, the merger faced hurdles, including opposition by Zee’s creditor Axis Finance.

Law firm Cyril Amarchand Mangaldas is representing Zee and its promoter in the SIAC, while law firm Shardul Amarchand Mangaldas & Co. is representing Sony Group companies.

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