NCLT issues notice on Zee's plea seeking directions for Sony merger

NCLT has granted two weeks to Sony to file its reply and listed the case for hearing on March 12

National Company Law Tribunal (NCLT) on Tuesday issued notice in a plea filed by Zee Entertainment Enterprises Ltd (ZEEL), which sought directions to enforce its merger with Sony, according to a report by Moneycontrol.

It said that the tribunal had granted Sony two weeks to file its reply and listed the case for hearing on March 12. On January 30, NCLT had issued a similar notice on a plea filed by Mad Men Films seeking the implementation of the merger with Sony. Mad Men Films is a shareholder of ZEEL.

During the hearing, Janak Dwarkadas, who was appearing for ZEEL, said that as NCLT had approved the merger, it was under its jurisdiction to entertain such petitions. Darius Khambata, who was appearing for Sony, said that the Japanese company would file an application questioning the maintainability of Mad Men's application.

In a filing on January 5, Zee said that it could ask the NCLT to enforce the $10 billion merger after a Singapore arbitration centre rejected an emergency petition by the Japanese company.

Sony scrapped the merger on January 22, ending a deal that could have created one of India's biggest TV broadcasters, claiming breaches of contract.

Zee rejected the claims and asked an Indian tribunal to order Sony to honour its obligations to complete the merger.

The Singapore International Arbitration Centre (SIAC) said it had no jurisdiction or authority to block Zee from approaching the Indian tribunal, adding the merger fell within the purview of the National Company Law Tribunal of India, Zee said in filings to Indian stock exchanges.

Sony said in a statement that it was disappointed by the decision but it was a procedural ruling only on whether Zee could pursue its application with the company law tribunal.

"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," it added.

"We remain confident in the merits of our position in both Singapore and India."

The Zee-Sony merger, in the works for two years, would have created an Indian TV juggernaut with more than 90 channels across sports, entertainment and news that would have competed with the likes of Walt Disney, and billionaire Mukesh Ambani's Reliance. In terminating the merger, Sony also cited alleged failure by the Indian media company to meet some financial terms of the deal, a dispute over compliance issues including disposal of some Russian assets and its $1.4 billion Disney cricket rights deal, Reuters reported last week.

(With agency inputs)