End of Zee-Sony deal may trigger a spate of legal wranglings
Sony Group's decision to call off its deal with Zee Entertainment Enterprises and seek a termination fee of $90 million (Rs 748 crore) is likely to trigger a messy legal war, with both companies filing cases against each other in multiple judicial forums, lawyers said.
After this announcement, both parties can approach an arbitration tribunal as per their contractual agreements, or a high court for any interim relief, they said.
On Monday, Zee informed stock exchanges that Sony Group companies Culver Max Entertainment and Bangla Entertainment terminated the merger co-operation agreement and invoked arbitration to get several reliefs.
After the approval of the scheme by the National Company Law Tribunal, any dispute relating to changes in the key terms of the merger scheme shows that there are attempts to seek more than what the parties had already agreed under the deal, said Ashish Pyasi, partner of law firm Aendri Legal.
«As the parties have already exercised their negotiation option as per the agreement and are now opting for an arbitration dispute, then the termination of the agreement can also be challenged on grounds including non-performance of any conditions of the agreement before the arbitral tribunal,» said Pyasi. «In such an event, the tribunal will decide the issues after considering all the facts to see whether the respective terms have been complied with or not, and whether there is a breach of the agreement or not as alleged.»
Sony stays mum on Zee's request for merger deadline extension
Ashish K Singh, managing partner of law firm Capstone Legal, said after the Securities Appellate Tribunal set aside the market regulator's ban on Zee's Punit Goenka from holding any top executive
