The Singapore International Arbitration Centre on Sunday rejected the emergency arbitration petition filed by Japanese major Sony against Zee Entertainment Enterprises over their failed merger, citing lack of jurisdiction, said a source privy to the development.
Sony Pictures Networks India had filed the petition against Zee Entertainment after terminating their merger that would have created a $10 billion entertainment giant with 25 per cent of the market share among the general entertainment channels.
A Zee spokesperson declined to comment on Sunday while an email sent to Sony Pictures Networks did not elicit any comments.
The litigation between Zee and Sony started after Sony sought $90 million as termination fees from Zee, saying it did not comply with several pre-conditions set in the merger agreement. Zee denied Sony’s allegations and made counterclaims against the Japanese firm at the SIAC.
A parallel litigation was also initiated in the National Company Law Tribunal in Mumbai by a Zee shareholder. The NCLT has given three weeks to both Zee and Sony to file their replies. The matter will be heard next month.
Sony Pictures had enlisted the services of senior lawyer Harish Salve to present its case at the SIAC. At the same time, Zee engaged former Attorney General of India Mukul Rohatgi to represent its side.
An earlier report in Reuters said Sony’s notice to Zee alleged the Indian company had not made commercially reasonable efforts to meet specific financial thresholds, including cash availability. According to Sony, Zee’s cash position as of September 30, Rs 476 crore, fell “much below the requirements” of the merger agreement.
Sony also expressed reservations about Punit Goenka becoming the managing director and chief executive officer of the merged entity after the Securities and Exchange Board of India (Sebi) took action against Goenka for alleged fund diversion. Securities Appellate Tribunal had set aside the Sebi order in October last year.
First Published: Feb 04 2024 | 3:36 PM IST
