Mad Men Film Ventures seeks NCLT order against Sony over Zee merger

Mad Men Film Ventures, a shareholder of Zee Entertainment Enterprises, on Friday filed a fresh application in the National Company Law Tribunal seeking an order to refrain Sony from proceeding contrary to the NCLT’s earlier decision sanctioning merger of the two media companies.

Sony had last month terminated the agreement with ZEEL to merge its two Indian entities — Culver Max Entertainment (earlier known as Sony Pictures Network India) and BEPL– with the Indian media company.

The termination notice came months after the Mumbai bench of NCLT on Aug. 10, 2023 approved the scheme of merger of ZEEL with Sony group entities.

In its fresh plea on Friday, Mad Men Film Ventures sought the Mumbai bench of NCLT’s urgent intervention to restrain Sony Pictures India Networks from proceedings against the tribunal’s order dated August 10 as the matter is scheduled for hearing on March 12.

The fresh plea came after Sony initiated an arbitration proceedings before Singapore-based international tribunal SIAC against Zee claiming $90 million (around Rs 748.5 crore) as a termination fee.

Mad Man Film in its application stated that Sony cannot pre-empt proceedings pending before this court.

“I am one of the shareholders. Even assuming your arbitration continues there, you cannot have the sanction of the scheme set aside,” the application said.

Mustafa Doctor, who represented Mad Man Film Ventures, said, “They (Sony Pictures) are trying to get orders from the international tribunal. We are only saying that during the pendency of the company application, this court restrains respondents from taking actions contrary to the operative order of the sanctioning scheme, including taking steps contrary to the sanctioned scheme.”

Meanwhile, Sony objected to the maintainability of Mad Man Film’s application and pointed out that it has “no locus” in the matter.

Darius Khambata, the counsel representing Sony, argued, ‘We are objecting to the maintainability of the petition. There may be five interim applications (IA), all on the same points. That can be argued on March 12.

“The same point will arise in all IAs. It is part of the previous IA. I am opposing their intention to come here.”

The NCLT bench headed by Justices Lakshmi Gurung and Charanjeet Singh Gulati, said, “We are not in favour of granting relief to you (Mad Man) right now.

“Granting relief now will lead to allowing the petition. So, we will call for responses from the respondents (ZEEL and Sony Pictures). This case is gaining national importance now… But the scheme is now sub-judice.”

However, the tribunal granted two weeks for ZEEL and Sony Pictures to file a reply to this fresh application and posted the matter for hearing on March 12 along with other petitions concerning the merger of the media houses.

On Jan. 30, Mad Men Film Ventures had filed an application in NCLT seeking the enforcement of the merger scheme.

On Feb. 4, Sony Pictures approached the Singapore International Arbitration Centre (SIAC) seeking directions to prevent ZEEL from seeking legal remedies from other legal forums, including the NCLT.

After SIAC rejected Sony’s plea, Mad Man Film again 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 tribunal.

While terminating the merger deal on Jan. 21, Sony Group had said ZEEL failed to satisfy merger conditions including addressing the question of who would lead the merged entity.

ZEEL has also filed a petition before the NCLT, seeking a direction for Sony group to implement the merger. It also initiated legal actions to contest the claims of $90 million filed by Sony Group before SIAC.

If the Sony-Zee merger was completed, the combined entity would have owned over 70 TV channels, two video streaming services — ZEE5 and Sony LIV — and two film studios — Zee Studios and Sony Pictures Films India — making it the largest entertainment network in the country. PTI