Zee shareholder files fresh plea in NCLT against Sony’s move on merger pact

Zee shareholder, Mad Man Film Ventures Ltd, has approached the National Company Law Tribunal  seeking orders to restrain Zee Entertainment Enterprises Ltd (Zee) and Sony Pictures India Networks (now Culver Max) from acting contrary to a 2023 NCLT order by which a merger between Zee and Sony was sanctioned.

The shareholder sought urgent orders restraining Zee and Sony till the petitions concerning the Zee-Sony merger were finally heard on March 12.

A coram of judicial member Lakshmi Gurung and a technical member Charanjeet Singh Gulati today refused to grant any urgent relief opining that the issue required adjudication.

“This issue has to be adjudicated. What is going to happen till March 12? We are not in favour of granting relief to you right now. Granting relief now will lead to allowing the petition. We will call for responses from the respondents. But the scheme is now sub-judice”, the tribunal said.

It granted two weeks for Zee and Sony to file a reply to the application and posted the matter for hearing on March 12 along with other petitions concerning the Zee-Sony merger.

The merger between Sony and Zee was announced on December 22, 2021. However, it was called off by Sony Pictures (now Culver Max) recently.

Mad Man later approached NCLT seeking the enforcement of the merger scheme, which the tribunal had approved in August 2023.

In the meantime, Sony approached the Singapore International Arbitration Centre (SIAC) on February 4 seeking directions to prevent Zee from seeking legal remedies from other legal forums including the NCLT.

After the SIAC rejected Sony’s plea for urgent relief, Mad Man approached the NCLT seeking an urgent order to ensure that any order passed by any other forum concerning the Zee-Sony merger would be subject to the orders of the NCLT.

Senior Advocate Mustafa Doctor appeared for Mad Man today and argued that the parties to the merger scheme cannot pre-empt proceedings taking place before the NCLT.

“Even assuming your arbitration continues there, you cannot have the sanction of the scheme set aside. They are trying to get orders from the international tribunal. I am only saying, that pending the hearing of the company application, this court restrain the respondents from taking actions contrary to the operative order of the sanctioning scheme, including taking steps contrary to the sanctioned scheme,” Doctor argued.

He further argued that the order sanctioning the scheme continued to remain in force as nobody has sought for it to be set aside.

“So you cannot act contrary to the order. Any other proceedings would be subject to the outcome of these proceedings,” he prayed.

Senior advocate Darius Khambata appeared for Sony and opposed Mad Man’s locus to file such an application.

“What is this anxiety? I am opposing their locus to come here. The court has rightly observed that there are conditions (in the sanctioning order) which were required to be satisfied. When they (Mad Man) voted in favour of the scheme, they agreed (to all conditions). But now they are trying to rewrite the scheme,” Khambata argued. Bar And Bench