Sony sues MX player over non-payment of dues of over Rs 31 crore

Sony sues MX over unpaid dues

Culver Max Entertainment Private Limited (formerly known as Sony pictures) has filed a plea against against MX Media & Entertainment Pte Ltd. (Singapore), MXP Media India Ltd. and MX Media Co. Ltd. (BVI) (United Kingdom) at the Delhi High Court over unpaid dues of Rs 31 crore arising out of a 2021 agreement.

According to a statement by Sony's lawyer, Karanjawala and Co, "Delhi Court on May 27 has passed directions to the effect that if any sale of assets of MX Media & Entertainment Pte Ltd. (Singapore) is undertaken, an amount of Rs. 31.25 Crores payable to Sony is to be preserved from the sale proceeds of its assets. It also directed that on conclusion of the transaction for sale of assets, Sony is to be informed through its counsels."

According to the plea reviewed by Moneycontrol, Sony and MX entered into a distribution agreement in December 2021 by which Sony had granted certain rights including integration of the Service API and making available the Service Thumbnails on the Designated Digital Platform. The agreement was to operate in two terms till March 2023.

However, MX terminated the agreement in March 2022, and by then the company owed Rs 31. 25 crore. According to Sony despite many assurances from MX to repay the amount, they did not do so. However, Sony came to know that DIVX had filed an application for insolvency against the MX Media in Singapore high court seeking winding up of the company. While the court had ordered winding up of the company, a higher bench, however stayed the order of winding up for a period of six weeks. According to Sony, the stay order will come to an end on June 20, after which the winding up will proceed as usual.

The plea alleged that all the three companies  "have acted for each other,
and undertaken and performed each other's obligations as a single
economic entity (in the Singapore proceedings)."

Under these circumstances, Sony filed a plea under section 9 of arbitration and conciliation act, 1996 seeking an interim relief before it could start arbitral proceedings against MX. Sony's main contention in the plea is that since the company appears to be in bad financial condition, they wish to protect their interest.

Sony was represented by senior counsel Gaurav Pachnanda, along with a team from Karanjawala & Co.