Zee Entertainment Enterprises Ltd (ZEEL) has received a favourable ruling from an arbitral tribunal in a dispute initiated by Aditya Birla Finance Limited (ABFL) concerning a ₹134 crore term loan extended to Siti Networks Limited.
ABFL had initiated arbitration to enforce a Letter of Comfort (LOC) it claimed had been issued by Zee in relation to the loan. ABFL sought reliefs including a declaration that the LOC amounted to a guarantee, directing Zee to repay ₹174.57 crore with interest or refund ₹108 crore that Siti allegedly transferred to Zee during FY21. Zee also filed a counter-claim of ₹15 crore, which it said was money owed by ABFL to Zee, appropriated from a fixed deposit originally made by Siti.
Zee contested ABFL’s claims, arguing that the LOC did not constitute a financial guarantee and that the ₹108 crore reflected valid business payments for channels and signals under interconnection agreements governed by TRAI rules.
In a final award dated May 12, 2024, the arbitral tribunal rejected all claims made by ABFL. However, it did not issue a conclusive ruling on Zee’s ₹15 crore counterclaim. The tribunal instead granted Zee the liberty to pursue remedies before the National Company Law Appellate Tribunal (NCLAT).
The ruling significantly relieves Zee of potential liabilities and strengthens its legal stance amidst ongoing financial and corporate challenges.
Disclaimer: The information provided is for informational purposes only and should not be construed as legal or financial advice. Please consult a qualified advisor before making any investment or legal decisions.
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