Singapore emergency arbitrator denies interim relief to Sony in Zee merger case

An emergency arbitrator at the Singapore International Arbitration Center (SIAC) on Sunday dismissed Sony Pictures’ application for emergency interim relief in its case with Zee Entertainment Enterprises.

In its application, Sony asked the court to prevent Zee from seeking legal relief at the National Company Law Tribunal (NCLT) or any other tribunal.

However, the emergency arbitrator stated that it had no jurisdiction or authority to prevent Zee from approaching the NCLT to carry out the merger as these issues were within the statutory regime and for the NCLT to decide. Ta.

On January 22, Sony Pictures (Culver Max) dissolved its $10 billion merger with Gee. In the letter, Sony argued that Zee had no choice but to cancel the merger because it did not meet the precedent conditions. Both parties received approval for the merger from the NCLT on August 10 last year.

Senior Advisor Harish Salve attended from Sony, while Gee was represented by Senior Advisor Janak Dwarkadas and Singaporean lawyer Davinder Singh. Shyamala Venkachalam, Zee’s chief legal officer, led the case.

Immediately after sending the termination letter, Sony separately wrote to Mr. Gee stating that it had begun emergency arbitration proceedings against the company with SIAC.

Culver Max Entertainment, a Sony Group company, has demanded a $90 million termination fee from the Indian entertainment company for violating the terms of its merger agreement.

However, Mr. Gee argues that Culver Max, a subsidiary of Sony Pictures Entertainment, and BEPL have no right to terminate the contract, and that the $90 million termination fee is baseless and legally unacceptable. said. Dissatisfied with this decision, Gee informed the exchanges that it would initiate legal proceedings against Sony at NCLT and SIAC.

“The company has called on Culver Max and BEPL to immediately reverse the termination and confirm that they will fulfill their obligations to bring into force and carry out the merger plan approved by the National Company Law Tribunal,” the company said. We reserve all rights in this regard,” Gee said.

In his petition to the NCLT, Mr. Gee claims that Sony’s decision to cancel the merger was “predetermined” and that during the 30-day consultation period, Mr. Gee in good faith asked for a six-month extension to close the transaction. He said he proposed. .

The merger had received all necessary regulatory approvals since it was first announced in December 2021, but Sebi filed suit against Subhash Chandra and Punit Goenka for alleged misappropriation of funds. , which prohibited them from holding key management positions in listed companies, hit a major hurdle. .

However, the Securities Appellate Court set aside Sebi’s order, paving the way for Goenka to take over as chief executive officer and managing director of the combined entity.