Sony Group-owned entities Culver Max Entertainment and Bangla Entertainment have urged the Singapore International Appellate Tribunal (SIAC) to restrain Zee Entertainment Enterprises (ZEE) from seeking legal remedies from the National Company Law Tribunal (NCLT) or any other court or tribunal in India and elsewhere.
Sony has alleged in its application before SIAC that Mad Man Film, which filed the application before NCLT on December 5, is a proxy for ZEE.
“An order injuncting the respondent (ZEE) from seeking any remedy(ies), directly or indirectly (through any proxies), before the NCLT, or any other court(s) or tribunal(s) in India or elsewhere, in connection with or arising out of the merger cooperation agreement (MCA), including in respect of or for the implementation of scheme, during the pendency of the contractual disputes amongst the parties under the MCA,” Sony said in its plea to the SIAC.
The company contended that the NCLT is a statutory body and doesn’t have the jurisdiction to adjudicate its contractual dispute with ZEE.
Sony’s India units terminated the merger deal with ZEE on January 22 for alleged violation of the merger agreement and had also asked ZEE to pay $90 million in termination fees for the breach in implementing the closing conditions.
The termination fees has to be paid within 14 days from the termination date, as per the merger agreement between the two companies which has been reviewed by ET.
It is pertinent to note that ZEE and one of its shareholders Mad Man Film Ventures have moved the Mumbai bench of the NCLT seeking directions for Sony to implement the merger agreement.
Sony filed the application on January 22, 2024 seeking an emergency interim relief application under Rule 30 and Schedule I of the SIAC Rules and in terms of Clause 9.2.1 of the merger cooperation agreement (MCA).
The SIAC began hearing the matter on Wednesday.
It is pertinent to note that the merger agreement between Sony Group’s India entities and ZEE requires both parties to inform the regulatory bodies within 15 days of the termination of the agreement.
Both Sony and ZEE now have time till February 6 to inform the Competition Commission of India (CCI), NCLT, and stock exchanges about the termination of the merger and that they don’t intend to implement the merger.
As per the merger agreement, the two parties also have to withdraw all pending applications filed before governmental authorities, including the NCLT, for approval of the scheme or the transactions contemplated under the transaction documents.
The merger agreement allows both parties to terminate the agreement in the event of violation by the other party.
In its application to the SIAC, Sony noted that ZEE failed to satisfy many of its different and material closing conditions precedent even after 25 months had passed since the agreement was signed in December 2021.
It added that ZEE provided only piecemeal and partial proposals to address any of the material issues.
Source: Economic Times