On February 4, SIAC denied emergency interim relief to SPE’s Culver Max Entertainment, previously known as Sony Pictures Networks India (SPNI) and Bangla Entertainment against Zee, stating it has no jurisdiction to prevent Zee from approaching NCLT and that the tribunal is the appropriate forum to handle the dispute.
Sony Pictures Entertainment (SPE) on Monday said it will continue to arbitrate against Zee Entertainment Enterprises before the full Singapore International Arbitration Centre (SIAC) tribunal, a day after the global arbitral institution declined emergency interim relief to its India units.
On February 4, the SIAC denied emergency interim relief to SPE’s Culver Max Entertainment, previously known as Sony Pictures Networks India (SPNI) and Bangla Entertainment against Zee, stating it has no jurisdiction to prevent Zee from approaching the NCLT and that the tribunal is the appropriate forum to handle the dispute.
“We are disappointed in the decision by the Singapore International Arbitration Centre (SIAC). This decision is only a procedural one, ruling only as to whether Zee Entertainment would be permitted to pursue its application with the NCLT,” SPE said in a statement.
The US-headquartered media company said it is confident about the merits of its position in both Singapore and India.
“We will continue to vigorously arbitrate the matter in Singapore in front of a full SIAC tribunal and pursue SPNI’s right to terminate the merger agreement and seek a termination fee and other remedies,” it added.
Ashish Pyasi, Partner, Aendri Legal, said the NCLT has the necessary power and jurisdiction under Section 231 of the Companies Act to implement the compromise or arrangement that it has approved.
“Since the action initiated before SIAC is on termination of a separate contract and fees for the same, the issue before the NCLT is different, and it is to enforce the scheme already approved by it. These may lead to independent findings and relief as the issue will be common in them. It is possible that both remedies can be pursued simultaneously by the parties as both remedies are independent of each other,” he added.
Sony’s India units had terminated their merger agreement with Zee on January 22 citing breaches by the Indian media company and initiated arbitration proceedings against it seeking $90 million in termination fees.
While challenging the grounds on which Sony terminated the merger deal, Zee has approached the NCLT seeking directions for Sony to implement the merger scheme of the arrangement, which was approved by the tribunal on August 10, 2023.
In its plea to NCLT dated January 24, Zee has requested the tribunal to prevent Sony Group-owned firms from adopting any further steps that could jeopardise the implementation of the scheme.
It has also urged the tribunal to appoint a committee comprising two directors each from Zee and Sony companies to oversee the implementation of the composite scheme of arrangement.
The NCLT will hear Zee’s plea against Sony’s termination notice on Tuesday.
“Sony has the right to defend the merger proceedings before the NCLT, which will consider the condition precedents/provisions of the Scheme read with the merger cooperation agreement and the reasons for its termination,” said Himanshu Vidhani, partner at law firm Chandhiok & Mahajan. “The proceedings before SIAC will take its own time as the emergency arbitrator has decided not to injunct Zee from proceeding before the NCLT.”
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