In a recent turn of events, Zee Entertainment has decided to seek the enforcement of its $10 billion merger with Sony’s Indian unit through an Indian tribunal. This move comes after Sony’s emergency petition to the Singapore International Arbitration Centre (SIAC) was rejected on February 4. The rejection has paved the way for Zee to approach an Indian tribunal, as reported by a news agency.
Sony had terminated the merger on January 22, alleging breaches of contract. This decision marked the end of a potential collaboration that could have resulted in the formation of one of Bharat’s largest TV broadcasters. Zee, in response, firmly denied these claims and is now looking to the Indian tribunal to order Sony to fulfill its obligations and complete the merger.
According to Zee’s filings to Bharat stock exchanges, the SIAC clarified that it lacked the jurisdiction to prevent Zee from approaching the Indian tribunal. The SIAC argued that the merger falls under the purview of the National Company Law Tribunal of Bharat.
Sony expressed disappointment in a statement, emphasizing that the decision was procedural and focused solely on whether Zee could proceed with its application to the company law tribunal. Despite the setback, Sony plans to vigorously arbitrate the matter in Singapore before a full SIAC tribunal. The company remains committed to upholding Sony India’s right to terminate the merger agreement and pursuing remedies, including a termination fee.
“We will continue to vigorously arbitrate the matter in Singapore in front of a full SIAC tribunal and pursue SPNI’s (Sony India) right to terminate the merger agreement and seek a termination fee and other remedies,” Sony stated. “We remain confident in the merits of our position in both Singapore and India.”
The proposed Zee-Sony merger, in progress for two years, aimed to create a powerful Indian TV entity with over 90 channels spanning sports, entertainment, and news. Sony’s decision to terminate the merger cited alleged non-compliance by Zee with certain financial terms, disputes over the disposal of Russian assets, and issues related to a $1.4 billion Disney cricket rights deal, as reported by news agency last week. Despite the challenges, Sony remains confident in the merits of its position in both Singapore and Bharat as the dispute unfolds.
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