NCLT issues notice to Sony in response to Zee’s plea of stalled $10 billion merger implementation
Sony informed the tribunal that the company was already in the midst of preparing an application to contest the maintainability of Zee's petition and requested that this application be scheduled for consideration alongside the current one on the upcoming date.
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The National Company Law Tribunal (NCLT) has issued a notice to Culver Max (formerly Sony Pictures Networks) on Tuesday in response to an application filed by Zee Entertainment Enterprises. Zee’s application seeks the implementation of the $10 billion merger with Sony that was announced back in December 2022.
A panel comprising judicial member Lakshmi Gurung and technical member Charanjeet Singh Gulati instructed Sony Pictures to submit a response to the application within a two-week period.
The tribunal has scheduled the hearing on this matter for March 12.
NCLT gave the merger a go ahead on August 10, 2023. This is why only NCLT had the jurisdiction to pass judgement on the merger, argued Senior Advocate Janak Dwarkadas.
On the other hand, Senior Advocate Darius Khambata, representing Sony, informed the tribunal that the company was already in the midst of preparing an application to contest the maintainability of Zee's petition and requested that this application be scheduled for consideration alongside the current one on the upcoming date.
NCLT had granted a hearing to the plea of Mad Men Film, a Zee Entertainment Enterprises Limited shareholder seeking the execution of the terminated merger.
Legal experts were of the opinion that the move could possibly breathe life into stalled merger.
According to experts, if the NCLT determines that the merger between Zee and Sony was not conditional or that any conditions were indeed met, this could lead to a series of outcomes.
Potential outcomes, contingent on NCLT's findings, include proceeding with the original merger plan, emergency arbitration in Singapore, adherence to NCLT directives, shareholder engagement, and additional regulatory approvals.
For now, The Singapore International Arbitration Centre (SIAC) has denied emergency interim relief sought by Culver Max and Bangla Entertainment (BEPL).
Sony had requested SIAC to prevent Zee from seeking legal remedies from the NCLT or Indian or international courts until the arbitration proceedings are completed.
According to SIAC, its emergency arbitrator has no jurisdiction or authority to stop Zee from approaching the NCLT to implement the merger scheme.
Zee has also asked the tribunal to prevent Sony Group-owned firms from adopting any further steps that could jeopardise the execution of the scheme, alongside requesting appointment of a committee consisting of two directors each from Zee and Sony companies to oversee the execution of the composite scheme of arrangement.
Though disappointed by the decision of SIAC, Sony said in a statement that they 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.
“We remain confident in the merits of our position in both Singapore and India,” they said.
