Zee Entertainment Enterprises Ltd (ZEEL) on Tuesday said the Arbitral Tribunal has rejected all claims filed by Aditya Birla Finance Ltd (ABFL) in a ₹134 crore dispute linked to a loan extended to Siti Networks Ltd.
Zee share price rallied after the relief from the Arbitral Tribunal. Zee shares spiked as much as 4.39% to ₹122.30 apiece on the BSE.
Aditya Birla Finance had initiated arbitration proceedings against Zee Entertainment Enterprises, seeking enforcement of a Letter of Comfort (LOC) allegedly issued by the company in connection with a ₹134 crore term loan granted to Siti Networks. The finance firm had claimed that the LOC effectively served as a corporate guarantee and demanded that Zee be held liable for the repayment.
In its plea, ABFL had sought multiple reliefs, including a declaration that the LOC constituted a guarantee and directions for Zee to pay the outstanding loan with interest — totaling ₹174.57 crore. Additionally, it sought a refund of ₹108 crore that Siti had paid to Zee in FY 2020–21.
However, Zee contested the claim, asserting that the LOC did not amount to a financial guarantee. The company maintained that the ₹108 crore was part of a legitimate business transaction—consideration for signals and channels provided to Siti as per Interconnection Agreements governed by the TRAI Act.
Zee further countered with a ₹15 crore claim, citing that amount was deposited by Siti in fixed deposits on Zee’s behalf but had been appropriated by ABFL.
Arbitral Tribunal Order
In its final award dated May 12, 2024, the Arbitral Tribunal dismissed all claims made by ABFL. However, it did not make a final ruling on Zee’s counterclaim, instead leaving the matter open and allowing both parties to pursue further remedies before the National Company Law Appellate Tribunal (NCLAT).
At 1:45 PM, ZEE share price was trading 4.01% higher at ₹121.85 apiece on the BSE.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
