Limitation is an inherent aspect of the arbitrable point, observes Karnataka High Court in a construction case

Case Name: Shivaraj Kamshetty v. The Managing Director, Karnataka State Agricultural Marketing Board & Ors 

Case No.: CIVIL MISC PETITION NO.200003 OF 2022 

Dated: April 19,2024 

Quorum: Hon’ble Justice C. M. Joshi 



Under Section 11 of the Arbitration and Conciliation Act, 1966, a petition has been submitted in order to appoint an arbitrator to mediate the disagreement that has arisen between the petitioner and the respondents. The responders had requested proposals for the work of building a building at Kalaburagi, and the petitioner claims he is a reputable Class-I Contractor with over 35 years of expertise.  

On August 22, 2011, the petitioner and the respondents entered into an agreement after the petitioner’s bid was accepted by the respondents. A sum of Rs. 109.00 lakhs was agreed upon to be paid for the completion of the work. In accordance with the specifications and drawings provided in the agreement, the petitioner successfully finished the contracted task.  

The respondents granted approval on March 25, 2014, for the petitioner to finish the excess work that was assigned to him. The total amount of work completed was Rs. 1,22,16,239/-as a result of additional work that was also approved by the responders on May 7, 2015. The respondents had a delay in responding to the final bill, which was submitted to them on September 28, 2015, as a result of their approval of the additional work. 

On March 25, 2014, the respondents gave the petitioner permission to complete the extra work that had been given to him. Because of additional work that was also allowed by the respondents on May 7, 2015, the total amount of work accomplished was Rs. 1,22,16,239/-. Due to their acceptance of the additional work, the responders took longer than expected to respond to the final bill, which was delivered to them on September 28, 2015. 

The petitioner had corresponded with the respondents on multiple occasions between 2011 and 2017, disputing various points, including the computation of the dues and the 10% margin of profit. In the end, the petitioner served a legal notice on May 16, 2020, demanding payment of Rs. 2,53,22,934/-, to which the respondents replied on June 16, 2020. 

The petitioner requested that the respondents designate a single arbitrator in accordance with Clause 4 of the Special Conditions of Contract Read With Clause 24 of the General Conditions of Contract. Since the respondents refused to agree to the arbitrator’s appointment, the petitioner was forced to file an application with this court pursuant to Section 11 of the Arbitration and Conciliation Act.  


The petitioners’ counsel argued that Shivaraj Kamshetty was aboard a bus from Mangaluru to Udupi on December 27, 2009. Shivaraj’s bus was involved in a collision with another bus (registration number KA-01-F-8534) that was driven carelessly and rashly close to Pavanje village. Shivaraj suffered severe injuries as a result, and A.J. Hospital admitted him. 

The petitioner argues that the respondents had requested bids for the construction of a building at Kalaburagi, and he is a reputable Class-I Contractor with over 35 years of experience.  

In addition, the petitioner claims to be a businessman who makes Rs. 90,000 a month and that the accident prevented him from making money from his venture. He has also filed a claim suit under Section 166 of the Motor Vehicles Act, 1988, requesting payment to the owner and insurance company of the offending vehicle in the amount of Rs. 40,000,000. 



Speaking on behalf of the respondents, the learned attorney argued that the arbitration proceedings were unenforceable due to the petitioner’s claim being time-barred. He argues that even after the respondents had taken into account all of the petitioner’s arguments, the petitioner had made false accusations against them. As a result, the petition had no validity and could be rejected.  

It was contended by the respondents that the arbitrator has authority over the limiting question. The argument put forth was that the arbitrator ought to determine whether the claims are precluded by limitation.  

The ruling in a high court decision, which determined that the question of limitation is a combination of factual and legal inquiry, was cited by the respondents. As such, the arbitral tribunal ought to make that decision. Respondents stressed that Section 11 of the Arbitration and Conciliation Act (A&C Act) permits the court to reject arbitration only in cases where the claims are clearly barred by statute of limitations. 




  • Section 100 of Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966. Subject to the restrictions imposed by this Act or any other enactment, the Board will function as a body corporate with perpetual succession, a common seal, and the ability to sue or be sued in its corporate name. It will also be able to acquire, hold, and dispose of moveable and immovable property, enter into contracts, and carry out any other necessary, appropriate, or expedient actions for the purposes for which it was established. 
  • Sections 111 & 112 of the K.A.P.M (R&D) Act, 1966. The major responsibilities of the Board are listed in these sections. Educating people about controlled marketing, supporting market committees that are struggling financially, encouraging the grading and standardisation of agricultural products, and enhancing infrastructure for the transportation and sale of agricultural products are a few of these duties. 



The court determined that, in light of Clause-24 of the General Conditions of Contract, an arbitrator must be appointed to hear the disagreement that has arisen between the parties under these circumstances.  

In response to a request from this Court, all parties have agreed that Smt. Premavathi M. Manogoli, District Judge (Retd.), Plot No. 56, Teachers Colony, Near Jhanayogashram, Vijayapura, should be appointed as the only arbiter. 

The court held that the petition was allowed. The court noted that although the respondents contested the arbitration clause due to the claim’s limitation, they did not contest the existence of the arbitration agreement. According to this ruling, the arbitrator has the authority to decide the limitation problem since it is an integral part of the arbitrable point. 

The Supreme Court had previously ruled that the question of limitation is a mixed factual and legal matter that must be decided by an arbitral panel. The court relied on this ruling; The court also made it clear that Section 11 of the A&C Act permits it to reject arbitration only in cases where the claims are fundamentally precluded by statute. 


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Interim relief cannot be seeked for an International Arbitration Case: SC

Case title: Ilwohnibrand Co. Ltd. V. Mahakali Food Pvt.Ltd and Ors.

Case no: Arbitration case No.of 2023

Dated on: 3rd April, 2024

Quorum: Hon’ble Justice Sushrut Arvind Dharmadikhari  and Hon’ble Shri Justice Devnarayan Mishra

Facts of the Case:

The petitioner had business relationship with the respondent no.1 to 3. A sale contract was entered into between the petitioner and the respondents on 18.09.2019 for supply of 2014 MT ‘ Full-Fat Soya Grits’. However, respondents committed a breach of contract wherein there was neither the quantity supplied according to the contract nor the quality. Even for the sub-standard material supplied by the respondent, the authorities conducted raid and sealed the premises of the petitioner. Petitioner notified the respondent about the breach. Respondent though admitted the supply of substandard quality under the contract and promised to compensate the petitioner but no such compensation was ever paid. Another contract was entered into between the petitioner and the respondent wherein respondent insisted for enhanced rate and issued proforma invoice and payment was duly made by the petitioner. However, respondent again committed breach of contract by not supplying the material as per the timeline mandated in the contract and in fact only supplied goods worth $1,42,500 despite receiving advance payment of $375,000 and thereafter respondent did not make any supply and stopped answering the calls. Again, with malicious intent, respondents communicated that it shall pay the balance amount to the petitioner, but no heed has been paid. Efforts to resolve the dispute failed since the respondent did not want to and stopped making communication with the petitioner. Since, the contract between parties provides for resolution of dispute by way of arbitration to be conducted in India, the petitioner filed petition under the Section 9 (1)(i) of the Conciliation Act of 1996 before the Commercial Court which was dismissed for want of jurisdiction with liberty to the petitioner to approach appropriate forum. Hence, the present petition had been filed. Shri Aniket Naik, appointed as Amicus Curiae submitted that petitioner has already approached the Commercial Court under Section 9 of the Act of 1996 seeking interim protection. However, learned Commercial Court dismissed the application filed by the petitioner holding the same as not maintainable for want of jurisdiction as the matter pertains to international commercial arbitration and not domestic arbitration.

Contentions of the Appellant:

Learned counsel for the petitioner submitted that evidence of breach committed by the respondent are available and, therefore, an order of interim protection securing the amount involved in the arbitration is required to be passed since despite sending several reminders, respondent kept making false promises, but neither exported the balance shipment nor compensate for the delivery of sub-standard quality of products thereby putting the petitioner to suffer irreparable loss. In terms of section 2(e) and (f) of the act of 1996, the petition can by heard by this court being the jurisdictional court and the present arbitration being an international commercial arbitration. In an identical situation the apex court , in S.D. Containers V. Mold Tek Packaging Ltd., had remanded the case to the court to be tried under its original civil jurisdiction where the court held that while invoking its powers under clause (9) of the letter patent read with rule 1(8) of chapter IV of the rules of the exercise its extra ordinary civil jurisdiction. Hence, the petition which is made under Section9 of the Act 1996 is exclusively triable by this court, therefore, the present petition to be deleted from the category of  the arbitration case and be listed under  the relevant category before appropriate single bench.

Contentions of the Amicus Curiae:

Petitioner has already approached the commercial court under Section 9 of the Act of 1996 seeking interim protection. But the court dismissed saying that the same is not maintainable as it pertains to international arbitration. Thereafter,

Petitioner has preferred the present application under section 9 (2)(1)(f) of the act of 1996 which is not maintainable in the view the fact that as per the Chapter 2 Rule 3 of Rules, 2008 an application under section 11 of the act of 1996 shall be registered as arbitration case which deals with the appointment of the arbitrator.  Court to sub-rule 8 Rule 10 Chapter 2, of the High Court rules 2008 which says that these cases can be considered as a  Miscellaneous Civil Case and also to be registered as a Miscellaneous Civil Case if they do not fall under the ambit of the first seven clauses which is not interlocutory to any proceedings. It is submitted that petitioner can very well file Miscellaneous Civil Case in terms of sub-rule 8 of Rule 10 of Chapter 2 of Rules of 2008, which can be entertained and appropriate orders can be passed.

Legal Provisions:

Section 9 of the Arbitration and Conciliation Act-  Seeking interim reliefs before, or during the arbitral proceedings, or at any time after the passing of the award but before it is enforced.

Section 11 of the Arbitration and Conciliation Act- Appointment of the arbitrator.

Sub-rule 8 of Rule 10 of Chapter 2 of the High Court of Madhya Pradesh rules of 2008- Filing miscellaneous civil cases.


Whether the petitioner is entitled to seek interim measure of protection and securing the amount involved in the arbitration   under section 9 of Arbitration act 1996 and section 10 of the commercial courts act,2015?

Courts Judgement and Analysis:-

The present petition itself is not maintainable on twin grounds:

(i) Firstly , the petitioner resorting to the liberty granted by the Commercial Court has filed present petition under Section 9 r/W Section 2(1)(f) of the Act of 1996 seeking interim protection before this Court which cannot be entertained by this Court.

(ii) Secondly, as rightly pointed out by Amicus Curiae, in terms of Chapter 2 Rule 3 of the Rules of 2008, an application Section 11 of the Act of 1996 shall be registered as an arbitration case which deals with appointment of Arbitrator which is not the case herein.

In the considered opinion of this Court, looking to the nature of case and the relief as sought for by the petitioner, the same does not fall within the category of an Arbitration Case. Rather the same ought to have been filed as a Miscellaneous Civil case falling within the ambit and scope of any other application of civil nature, not falling under any of the specified categories in terms of sub-rule 8 of Rule 10 of Chapter 2 of Rules of 2008. In view of the above   discussion, its hereby rejected. Accordingly, the present petition is hereby dismissed with liberty to the petitioner to file miscellaneous civil case in terms of sub-rule 8 of Rules of 2008.

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Judgement Reviewed By- Parvathy P.V.

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“Standardizing International boundaries: Navigating International Commercial Disputes Through Arbitration.”

Businesses that expand into international markets are susceptible to legal disputes brought on by differences in laws, rules, and corporate procedures as well as errors of thought, language, and cultural hurdles. Companies that deal with cross-border disputes may require the assistance of legal specialists to address such challenges. 

Arbitration has become a widely accepted form of dispute settlement on a global scale in the last several decades. It is becoming the main technique for resolving business conflicts. The combination of global economic expansion and technological advancements has made arbitration a successful dispute resolution process. 

This article examines at the notion of international business arbitration, how it functions, and how it sets itself apart from other means of settling disputes. 


The process of resolving disputes between parties in various countries by an arbitrator or panel of arbitrators is known as international commercial arbitration. It entails bringing the disagreement before arbitration rather than a court of law. A ruling on the dispute will be binding and made by the arbitrator or panel of arbitrators. 

To further break it down, it is comparable to a worldwide courtroom where corporations battle it out is international commercial arbitration. We have arbitrators who decide conflicts in secret rather than gavels and powdered wigs. You don’t have to reveal your cards to everyone, much like in a refined game of poker 

The swift advancement of international commercial arbitration has compelled national legal systems to accommodate it and establish supportive legislative frameworks that enable it to thrive. It has been correctly stated that there was a competitive phase between the legislature and judiciary in the 1980s and 1990s as they all attempted to draw in more international arbitration. The two primary outcomes of this competition were the modernization and liberalisation of arbitration systems and the transfer of international arbitration’s advantageous status to domestic courts.  


The Jay Treaty (1794) between Great Britain and the United States, which established three arbitral commissions to settle disputes and questions coming out of the American Revolution, is credited with helping to shape modern international arbitration.  

 Ad hoc arbitration courts were created in the 19th century as a result of several arbitral agreements that were reached, allowing them to handle a large volume of claims or particular instances. The most important was the arbitration of Alabama claims under the terms of the Treaty of Washington (1871), wherein the United States and Great Britain agreed to resolve disputes resulting from Great Britain’s failure to uphold its neutrality during the American Civil War.  

Established in The Hague in 1899, the Permanent Court of Arbitration is made up of a panel of jurists nominated by the member nations, from which the claimant governments choose the arbitrators. 


International Commercial Arbitration is like a global courtroom where businesses duke it out. Instead of powdered wigs and gavels, we’ve got arbitrators who settle disputes privately. Here’s how it works- 

  1. AGREEMENT: An arbitration agreement is normally signed by the parties to the dispute at the start of the international commercial arbitration process. The rules of procedure, the selection of the arbitrator or arbitrators, and the arbitration location are all outlined in this agreement, detailing the terms and conditions of the arbitration process.   
  2.  ARBITRATORS: The arbitration procedure might start after the agreement is signed. Once the arbitrator or panel of arbitrators has heard all of the arguments and supporting documentation, they will decide how to resolve the disagreement. The only situations in which this decision can be contested are those in which there was a significant irregularity in the arbitration procedure or in which the conclusion is against public policy. Otherwise, this decision is final and binding.   
  3.  GOVERNANCE: The United Nations Committee on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration is one of the international conventions and national legislation that govern international commercial arbitration. A thorough framework for the management of international business arbitration procedures is provided by this model law. 
  4.  HEARING, DECISION AND AWARDS: During the arbitration hearing, both parties submit their witnesses, evidence, and arguments. Final Decision: Based on the facts submitted, the arbitrator or panel renders a legally binding judgement. Award: An arbitral award, which serves as documentation for the ruling, is enforceable in national courts.  


  • MUTUAL CONSENT: Mutual consent is necessary for the mutual process of arbitration. Only when the parties have decided to start arbitration can it begin. If applicable, the parties may use a submission agreement to add any arbitration clause they see fit. Additionally, the parties cannot end the arbitration agreement on their own. 
  • CONFIDENTIAL PROCESS: The confidentiality of the matter is particularly protected under the arbitration rule. The arbitration procedure protects confidentiality and prevents pointless disputes about the parties and case. Any information disclosed during the process could lead to judgements and prizes. Trade secrets and other sensitive material submitted to the arbitration tribunal may, under certain conditions, be subject to access restrictions set by the parties. 
  • CHOICE OF ARBITRATOR: The arbitrator that each party selects should be someone they believe is qualified to hear their case. Every party designates one arbitrator if a three-person arbitration panel has been selected by the parties. Next, the two arbitrators who were chosen will have to agree on the presiding arbitrator. In addition, the centre has the authority to directly select members of the arbitration tribunal or recommend a suitable arbitrator with the necessary experience. 


  • Compared to typical litigation, arbitration is frequently quicker and more effective. This is due to the fact that arbitration procedures are typically more flexible and less formal than court proceedings, which may be expensive and time-consuming.  
  • By using arbitration, the disputing parties can select the arbitrator or panel of arbitrators of their choice. This entails that the parties may choose an arbitrator or arbitrators with subject-matter experience related to the issue, resulting in a better informed and equitable conclusion. 
  • Compared to typical litigation, arbitration is frequently more discreet. Since court procedures are typically open to the public, confidential information pertaining to the parties to the dispute may be disclosed. On the other hand, arbitration procedures are typically private, allowing the parties to maintain the confidentiality of the specifics of the disagreement.  


Enercon (India) Ltd. and Others v. Enercon GmbH and Another [1]:  

The Enercon case clarified the Indian courts’ authority to grant such a ruling, addressing the issue of impartiality in international commercial arbitrations. The judiciary issued directives regarding the situations in which it can intervene and emphasised the need for a balance between protecting the independence of arbitration proceedings and guaranteeing effective representation.  

This choice prompted parties to choose arbitration over other channels for resolving international disputes and helped to create a more arbitration-friendly environment. It is considered to be a landmark case in the ambit of international commercial arbitration.  

Bharat Aluminium Co. v. Kaiser Aluminium Technical Service, Inc. (BALCO case) [2]  

Judge intervention and party sovereignty must be delicately balanced, as highlighted by the BALCO case, a watershed moment in Indian arbitration. The principle of minimal intervention by the judiciary in arbitration proceedings was upheld by the Supreme Court in its decision. The court emphasised that arbitral decisions should be respected unless they are manifestly illegal or against public policy, and it clarified that the scope of judicial review under Section 34 of the Arbitration and Conciliation Act, 1996 is limited.  

Shri Lal Mahal Ltd. v. Progеtto Grano Spa [3]: 

The subject matter of this case is international commercial arbitration’s internal measures. The Supreme Court expounded upon the authority of Indian courts to provide interlocutory appeals in favour of foreign-sat arbitrations. 

Amееt Lalchand Shah v. Rishabh Enterprise [4]:  

The question of whether the parties might define the “seat” of arbitration through the arbitration agreement was addressed by the Bombay High Court in this particular case. The court determined the applicable criminal legislation by defining the significance of a seat carrier.  


Rapidly expanding economies need a reliable, stable dispute resolution process in order to draw in international investment. Economic actors in India and overseas have developed a strong preference for arbitration as a means of resolving disputes because of the enormous backlog of cases that are waiting in Indian courts. 

India has not always adhered to worldwide best practices in arbitration, even though it was one of the founding members of the New York Convention. But there has been a significant change in mindset during the past five years. Courts and lawmakers in India have updated the arbitration laws to reflect global best practices. The pro-arbitration stance of the courts and the enactment of the 2015, 2019, and 2021 Amendment Acts provide grounds for optimism that Indian arbitration law would soon adopt these global best practices. 

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Written by Riddhi S Bhora  

[1] Enercon (India) Ltd. and Others v. Enercon GmbH and Another (AIR 2014 SUPREME COURT 3152)  

[2] Bharat Aluminium Co. v. Kaiser Aluminium Technical Service, Inc. (BALCO case) (CIVIL APPEAL NO.7019 OF 2005) 

[3] Shri Lal Mahal Ltd. v. Progеtto Grano Spa ((2013) 115 CORLA 193) 

[4] Amееt Lalchand Shah v. Rishabh Enterprise (CIVIL APPEAL NO. 4690 OF 2018) 


“Decision of Arbitral Tribunal to not Implead a Party to Arbitration is not an Interim Award”: Delhi High Court

Case title: National Highway Authority of India v. Ms IRB Ahmedabad Vadodra Super Express Tollways Pvt. Ltd

Case no.: O.M.P. (COMM) 455/2022 & I.A. 18565/2022

Order on: 2nd April 2024

Quorum: Justice Prateek Jalan


The petitioner, National Highway Authority of India (NHAI), challenged a decision of a three-member Arbitral Tribunal dated 01.08.2022. This decision rejected NHAI’s application under Order I Rule 10 of the Code of Civil Procedure, 1908 (CPC) for impleadment of the State of Gujarat as a party to the arbitral proceedings. The arbitral proceedings stemmed from a Concession Agreement dated 25.07.2011 between NHAI and the respondent, MS IRB Ahmedabad Vadodra Super Express Tollways Pvt. Ltd.


Advocates Mr. Ankur Mittal, Mr. Abhay Gupta, and Mr. Ankur Saboo represented NHAI. They argued that the State of Gujarat should be impleaded based on the obligations it undertook in a State Support Agreement dated 11.02.2016, which was related to the Concession Agreement.


Represented by Mr. Atul Nanda, Senior Advocate, the respondent contested NHAI’s application for impleadment, arguing that the Arbitral Tribunal lacked jurisdiction to decide on the impleadment of the State of Gujarat.

Mr. Nanda submits that the question of maintainability of a petition under Section 34 of the Act against an order of an arbitral tribunal declining impleadment of a third party is no longer res integra. He relies upon the decision in National Highway Authority of India vs. Lucknow Sitapur Expressway Ltd. (Lucknow Sitapur Expressway), The Court was, in that case, also concerned with a decision of an arbitral tribunal adjudicating disputes under a Concession Agreement. The Tribunal had rejected an application by NHAI for impleadment of a State Government on the ground that it was a party to a State Support Agreement.


Section 34 of the Arbitration and Conciliation Act, 1996 – Application for setting aside arbitral award.

It allows parties to challenge an arbitral award before the appropriate court on certain grounds, including that the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties. In this case, the petitioner NHAI, invoked Section 34 to challenge the decision of the Arbitral Tribunal rejecting its application for impleadment of the State of Gujarat.


The main issue was whether the decision of the Arbitral Tribunal rejecting NHAI’s application for impleadment of the State of Gujarat constituted an arbitral award, thus making it amenable to challenge under Section 34 of the Arbitration and Conciliation Act, 1996.


The court examined precedents, including the case of Lucknow Sitapur Expressway Ltd., which involved similar circumstances. In Lucknow Sitapur Expressway, it was ruled that a decision rejecting an application for impleadment did not constitute an arbitral award under Section 2(1)(c) of the Act. The court emphasized that for a decision to be considered an award, it must decide a substantive dispute or conclusively settle an issue pertaining to the heart of the dispute.

The court further clarified that the distinction between a decision on jurisdiction and one on merits did not affect the characterization of the decision as an award. Even if the tribunal ruled on the jurisdiction to decide on impleadment, it did not change the nature of the decision. The court referenced various legal principles and previous judgments to support its conclusion.

In light of the precedent set by Lucknow Sitapur Expressway and other relevant judgments, the court held that NHAI’s petition under Section 34 of the Act was not maintainable. Consequently, the petition was dismissed, and all pending applications were disposed of.

The court’s decision in the case of O.M.P. (COMM) 455/2022 reaffirmed the legal position established by precedent, particularly the Lucknow Sitapur Expressway case. It clarified the criteria for a decision to be considered an arbitral award and emphasized that decisions on procedural matters like impleadment did not fall under this category.

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Judgement Reviewed by – Chiraag K A

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Zee And Sony’s Proposed Merger Encounters A Hurdle – A Closer Examination Of The Shelved Deal


ZEE Entertainment and Sony’s Indian intended to merge to become one of the biggest entertainment companies in India. The two-year-old announcement of the $10 billion merger included plans to combine two streaming platforms, over 75 television channels, and film assets. Sony, however, has cancelled the merger due to unfulfilled requirements. There have been rumours of a dispute among the leadership, and ZEE has hinted that it might sue Sony. The parties have now cancelled the agreement and filed lawsuits against each other.


In the fast-paced world of media and entertainment, the proposed merger of ZEE Entertainment Enterprises Ltd. and Sony Pictures Networks India was a watershed moment with the potential to reshape the Indian entertainment industry. However, the highly anticipated merger was officially terminated on January 22, 2024.


In September 2021, the two media behemoths announced their initial merger agreement, which was a calculated decision to merge their digital assets, production operations, linear networks, and programme libraries. The goal of the merger was to establish the biggest entertainment business in India, with a broad range of products and services to appeal to different types of consumers. On December 21, the two companies signed the merger agreement following the completion of the 90-day due diligence period.

The proposed merger would give the Japanese group a sizable market share at a time when consolidation is changing the media landscape in India by creating a 74-channel powerhouse. Sony has pledged to invest $1.6 billion to increase its footprint, and the company will own 53% of the merged company.

Now, Sony Group Corp terminated its merger with ZEE Entertainment Enterprises Ltd. on January 22nd, after nearly two years of negotiating the $10 billion transaction. The situation was first reported on by Bloomberg, who cited leadership conflicts exacerbated by Indian regulatory authorities.


Sony released an official statement stating that the definitive agreements required the parties to discuss in good faith an extension of the end date required to make the merger effective by a reasonable period of time in the event that the merger did not close by the date twenty-four months after their signature date. It said that, among other reasons, the closing conditions of the merger had not been met by that date, which is why it did not close by the deadline.

The issues with the appointment were one of the primary reasons for cancelling the deal. Sony and Zee disagreed about who should lead the merged entity. Sony advocated for NP Singh, its India managing director and CEO, to take over as managing director in the interim, citing concerns about Punit Goenka, Zee’s managing director and CEO. These were exacerbated when the Securities and Exchange Board of India (SEBI) barred Goenka from holding any managerial positions while investigating allegations of fund siphoning. Goenka’s ban was eventually lifted. Nonetheless, Sony remained hesitant to proceed. Goenka offered to step down just days before the merger deadline, but he disagreed with N P Singh’s authority over the deal.


Sony invoked arbitration and legal action against ZEE for alleged breaches along with a $90 million termination fee with this cancellation, which could result in a protracted legal battle. ZEE, under the direction of Punit Goenka, has declared that it will refute Sony’s assertions.

At the Singapore International Arbitration Centre (SIAC), Sony has filed for arbitration against ZEE. To put the previously approved merger plan into effect, ZEE has filed a petition with the National Company Law Tribunal (NCLT) in Mumbai.


It’s possible that the merger’s termination will be detrimental to both parties. Sony and ZEE were both thinking about growing into the Indian market. Both businesses lost out on a chance to solidify their positions in India’s fiercely competitive entertainment sector as a result of the failed merger.

In conclusion, the ZEE-Sony merger’s unravelling serves as a reminder of the difficulties associated with media mergers and acquisitions. It highlights how crucial it is for all parties involved in such transactions to communicate clearly and conduct due diligence. It will be interesting to watch how ZEE and Sony face the legal implications and handle the opportunities and challenges in the rapidly evolving Indian entertainment industry once the dust settles.


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Written by – Surya Venkata Sujith

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