The Singapore International Arbitration Centre (SIAC) has denied interim relief to Culver Max, which operates Sony Pictures Networks India, and Bangla Entertainment, against Zee Entertainment Enterprises Ltd's plea before the National Company Law Tribunal (NCLT) seeking the implementation of the merger scheme, as per a regulatory filing.
Sony, along with Bangla Entertainment, pulled out of the proposed $10 billion mega merger with Zee via a termination notice issued on January 22.
This was followed by Zee announcing on January 24 that it has approached the NCLT and the SIAC against Sony's move to call off the merger, that was in the works since more than two years.
Sony and Bangla had subsequently sought emergency relief from the SIAC against the plea moved by Zee before the NCLT.
The Emergency Arbitrator of SIAC "has passed an award dated February 4, 2024, denying the application for emergency interim relief filed by Culver Max and BEPL (Bangla Entertainment)", Zee informed the exchanges today.
SIAC has determined that its emergency arbitrator has "no jurisdiction or authority to injunct the company from approaching the NCLT to implement the merger scheme since these are matters which fall within the statutory system and are for the NCLT to decide", it added.
At the Mumbai-bench of the NCLT, the Punit Goenka-led media major has sought directions to implement the merger scheme.
As per the merger agreement, inked on December 22, 2021, Zee and Sony , along with Bangla Entertainment, were to be merged into a single entity within 24 months.
After the deadline lapsed last month, both the companies entered into a month-long negotiation, which reportedly failed to yield results due to a lack of consensus over who would be heading the merged entity. While Zee pushed for Goenka, its MD and CEO, to be appointed as the head of the merged company, Sony wanted its CEO N P Singh to preside at its helm, reports had suggested.
"Although we engaged in good faith discussions to extend the end date under the merger cooperation agreement, we were unable to agree upon an extension by the January 21 deadline. After more than two years of negotiations, we are extremely disappointed that closing conditions to the merger were not satisfied by the end date," Sony said in its statement issued on January 22.
Zee contests Sony's claims
Zee, in its exchange filing, said it specifically denied the charge of not meeting the merger conditions. The company has "complied with all its obligations in good faith", it said, adding that Culver Max and BEPL are not entitled to terminate the merger agreement.
Zee has also refuted Sony's demand of $90 million termination fee, stating that such a demand is "legally untenable and has no basis whatsoever".
Culver Max and BEPL are in "default of their obligations" to bring the merger into effect, Zee added, while pointing out that the merger had already received the nod from the NCLT last year.
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