Zee And Sony Reach Amicable Settlement, Agree To Withdraw All Cases At Singapore Arbitration Centre And NCLT
Rajesh Kumar
29 Aug 2024 6:55 AM GMT
Zee Entertainment Enterprises Ltd. (ZEE) and Culver Max Entertainment Pvt. Ltd. (CMEPL), operating as Sony Pictures Networks India (SPNI), along with Bangla Entertainment Pvt. Ltd. (BEPL), have settled their dispute over the failed merger agreement.
The settlement resolves all ongoing disputes between the parties. Under the terms of this non-cash settlement, both Zee and Sony, including BEPL, have agreed to withdraw all claims and counterclaims related to the merger. This includes withdrawing from the ongoing arbitration proceedings at the Singapore International Arbitration Centre (SIAC) and all related legal actions initiated in the National Company Law Tribunal (NCLT) and other forums.
The merger, initially announced on December 22, 2021, was set to create a major media conglomerate valued at approximately $10 billion. However, the deal faced multiple obstacles and was eventually called off by Sony on January 22, 2024. The primary reasons stated for the termination included Zee's inability to meet certain financial conditions and a failure to reach a consensus on the leadership structure of the proposed merged entity.
In response to the termination, Sony sought $90 million in termination fees from Zee alleging that Zee had failed to fulfill the conditions of the merger agreement. Zee, on the other hand, demanded $90 million from Sony claiming that the cancellation of the merger had led to substantial costs amounting to ₹432 crore. Both companies were also embroiled in disputes concerning other costs related to the merger including litigation and damages.
Amid these disputes, Zee previously approached the NCLT to enforce the merger scheme approved in August 2023. This action was taken despite opposition from creditors and financial institutions. However, Zee withdrew this plea on April 7, 2024 and decided to focus on its arbitration claims.
The settlement agreement includes the withdrawal of all merger-related claims, counterclaims, and applications. This also entails the termination of the Composite Schemes of Arrangement that were filed with the NCLT. Both companies will notify the relevant regulatory authorities about these withdrawals effectively ending any ongoing or future liabilities between them.
