The dispute arises from an alleged breach of the terms outlined in a cricket broadcasting agreement between the two companies.
Zee Entertainment Enterprises, on Wednesday, said that Star India, owned by Walt Disney, has initiated arbitration proceedings against the broadcaster. This development follows the termination of the Zee-Sony deal. Zee opted to terminate the agreement for broadcasting ICC men’s and under-19 tournaments, a pact that was initially inked in 2022.
"We hereby inform you that, on March 14, 2024, Star India Private Limited ('Star') has initiated arbitration proceedings against the Company, under the alliance agreement dated August 26, 2022 entered between Star and the company, by filing a request for arbitration,"
Zee Entertainment said in an exchange filing.
Following Zee's announcement today, the stock fell over 3.47 percent on Friday's trading session. Zee Ent shares closed at ₹141.80 on March 15, against previous close at ₹146.90.
According to Star India's claim, filed under the Arbitration Rules of the London Court of International Arbitration, Zee is purportedly in violation of the terms stipulated in the agreement dated August 26, 2022.
On the other hand, Zee contends that Star India violated the agreement and has consequently filed a claim for 685.4 million rupees ($8.3 million), as announced during the disclosure of its quarterly results on February 13th.
"The company, based on its preliminary assessment of the Application, and on legal advice received, disagrees with the averments made by Star in the Application and will be filing appropriate response to the said Application, make counterclaims and undertake such actions, as may be required,"
Zee further said.
The latest alliance involving Zee has soured, following Sony's India unit backing out of a planned $10 billion merger with the broadcaster, citing various points of contention, including the cricket TV rights deal.
According to Reuters report, Zee's attempt to secure debt for the deal, which Sony claimed was done "without prior written consent," pushed its total debt beyond the threshold outlined in the merger agreement.
Although the Zee-Sony merger fell through, Disney and Reliance recently announced a merger, aiming to establish an $8.5 billion media giant in the country.
Source: Mint
