Zee Entertainment Enterprises Ltd has initiated legal proceedings against Sony Pictures Networks India and its committee toward encountering a $90 million break fee in connection with the restrictive joint venture agreement.
Zee Accuses Sony of Breaching Agreement:
Following the failure of their envisaged $10 billion merger plan, Zee Entertainment Enterprises Ltd (ZEEL) is demanding an exit fee of $90 million from Sony Pictures Networks India, now known as Culver Max Entertainment and its associate Bangla Entertainment Pvt. Ltd. Consequently, Zee terminated the agreement and demanded the termination fee as per the MCA terms.
Sony Counters with Arbitration Proceedings:
Before proposing the merger with Zee, Sony Group Corporation had accused Zee of not meeting certain conditions that needed to be satisfied before mergers can occur. It was Sony who had gotten the Singapore International Arbitration Centre (SIAC) involved in their search for a ninety million dollar breakup fee.
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Legal Battle Ensues:
Zee has challenged Sony’s claims in the SIAC arbitration. Additionally, Zee filed a petition with the Mumbai bench of the National Company Law Tribunal (NCLT) seeking an order compelling Sony Group to proceed with the merger. Notably, SIAC also rejected Sony’s request for interim relief to prevent Zee from approaching NCLT regarding the failed merger.
The Dispute:
The dispute is about the collapse of merger talks involving an Indian unit of Culver Max, which is affiliated with Sony, and Zee. They are both accusing each other of violating the contract hence the present lawsuit by one party against the other. In this case, Zee wants after termination of contractually agreed upon money while Sony opposes it and refers to it instead of arbitration.
