Zee seeks arbitration in Sony merger
February 5, 2024
By Chris Forrester
Two important elements are keeping the Zee/Sony merger on the front pages of India’s business newspapers. The first is that Singapore International Arbitration Centre (SIAC) has rejected an emergency petition for arbitration to happen. The request was made by Sony.
Zee, in response, says that it will now look for an Indian arbitration of the merger problems.
According to Zee’s filings to the Bombay Stock Exchange, the Singaporeans decided that it lacked the jurisdiction to prevent Zee from approaching an Indian tribunal, stating that the merger fell within the responsibilities of the National Company Law Tribunal of India (NCLT).
Sony noted it was disappointing in the SIAC statement, saying that the decision was procedural and focused solely on whether Zee could proceed with its application to the company law tribunal. Sony stressed it still plans to vigorously arbitrate the matter in Singapore before a full SIAC tribunal, maintaining its commitment to uphold Sony India’s right to terminate the merger agreement and pursue remedies, including a termination fee.
Even though the emergency arbitrator has rejected Sony’s emergency application Sony could still request arbitration under a more normal timetable.
“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.”
Zee has maintained that the $90 million termination fee demanded by Sony as being “legally untenable”, saying there was no basis to it.
The NCLT already has two actions on its desks: The first is from Zee itself, seeking an enforcement of the merger. The second is from a Zee shareholder group, Mad Men Film Ventures, and again seeking an enforcement of the merger.
However, other local comments suggest it is difficult to see the merger reinstated with both parties increasingly moving away from any prospects of compromise.