Singapore Panel Denies Emergency Relief to Sony
Culver Max, which runs Sony Pictures Networks India and Bangla Entertainment, had its request to temporarily stop the merger process of Zee Entertainment Enterprises Ltd at the National Company Law Tribunal turned down by The Singapore International Arbitration Centre. But on January 22nd, in an unexpected move, they decided not to go ahead with their planned $10 billion big merger with Zee. They made a clear retreat from the first proposal by ending the agreement with a notification.
After ending the contract, Zee decided to act: it went straight to NCLT and SIAC to challenge Sony’s decision – they had canceled a merger that many were looking forward to. Quickly reacting against Zee’s move at NCLT, Sony and Bangla Entertainment quickly asked for fast help from SIAC.
Following the decision of SIAC, Zee quickly informed the exchanges that the Emergency Arbitrator had given an award on February 4, 2024. This was after Culver Max and Bangla Entertainment’s request for urgent temporary relief was not accepted by the authority. After a thorough examination, SIAC has determined that its emergency arbitrator lacks the authority and capability to stop company activities related to seeking NCLT approval for executing a merger plan; such issues belong to statutory frameworks and therefore are under the oversight of NCLT.
At the Mumbai section of NCLT, Zee is asking for orders to carry out a merger plan according to the deal signed on December 22nd, 2021. This agreement states that within a period not more than 24 months from today, Bangla Entertainment and Sony will combine with Zee into one company. The ending happened because they could not agree on who should be the leader after joining together, even though they talked for a longer time than they had originally planned.
Zee clearly said no to the claims that they did not follow the rules of merging. They believe they really followed all necessary requirements. When Sony asked Zee for a $90 million fee if things ended, Zee thought this request had no legal support and made no sense. So, Zee gave reasons why Culver Max and Bangla Entertainment did not do what they were supposed to do for making the merge work well, even though NCLT had given its okay last year.
As SIAC adds more complexity to the business disagreement, Zee and Sony continue their legal fight; importantly, the result of this big merger story depends on a future NCLT hearing set for February 6.