The National Company Law Tribunal's (NCLT) Mumbai bench has issued a notice on Zee Entertainment Enterprises' plea that sought to enforce its merger with Sony's India unit Sony Pictures Entertainment. Sony has been given two weeks to file its response, and the matter has been listed for hearing on March 12.

The current development follows Culver Max's (formerly known as Sony Pictures Network India) plea filed to challenge the ZEE's petition. The current notices have been issued to both Culver Max and Bangla Entertainment (BEPL).

Following the development, ZEE shares saw some momentum before falling 0.96% against the previous closing price. At the current share price, ZEE shares are trading 41.1% down from its 52-week high touched on December 12, 2024.

The Emergency Arbitrator at the Singapore International Arbitration Centre (SIAC) on February 5, 2023, passed an award on February 4, 2024, denying the application for "emergency interim relief" filed by Culver Max and BEPL. It said the Emergency Arbitrator has no jurisdiction or authority to injunct the company from approaching the NCLT to implement the merger scheme since these are matters, which fall within the statutory system and are for the NCLT to decide.

Notably, both Culver Max and Bangla Entertainment Private Ltd (BEPL) had invoked arbitration against the company and sought "emergency interim reliefs" before the Singapore International Arbitration Centre (SIAC). ZEE, on the other hand, had approached the NCLT, Mumbai, seeking directions to implement the composite scheme of arrangement. It also initiated appropriate legal action to contest Culver Max and BEPL’s claims in the arbitration proceedings before SIAC.

The NCLT had earlier also issued a notice to Sony Group entities, seeking a response within three weeks, in relation to the plea filed by one of the Zee shareholders, Mad Men Film Ventures, for the implementation of the merger.

On January 22, 2024, the Japanese entertainment behemoth Sony Group Entities put an end to two-year-long merger negotiations with ZEE, citing the inability of the latter to fulfil the merger agreement. Sony also approached the international arbitration court and sought a termination fee worth $90,000,000 for "alleged breaches" by ZEE.

The $10-billion deal, which was initially announced in December 2021, would have created the country’s largest entertainment network with more than 70 entertainment channels giving an edge to its rivals such as Hotstar, Amazon Prime and Jio Cinema.

However, ZEE faced several hurdles and delays due to ongoing legal battles with capital markets regulator SEBI. The deadline for the completion of the merger was initially set on December 22, 2023. However, it was later extended till January 20, 2023.

Since the deal caused huge financial losses on both sides, they are now exploring legal options against each other. ZEE’s promoter Subhash Chandra is reportedly also considering criminal action against Sony. Also, the promoter family is reportedly considering increasing its stake to 26% from the earlier 4% in the domestic entertainment behemoth.

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