Arbitration Defeat: Zee Entertainment Loses to RailTel

Zee Entertainment and Margo Networks lost an arbitration case against RailTel Corporation, a PSU. The dispute centered on the termination of a content-on-demand contract. The Arbitral Tribunal dismissed both Zee's claims against RailTel and RailTel's counterclaims. Zee may appeal to overturn the decision.

Zee Entertainment Enterprises Limited (ZEEL) and its subsidiary Margo Networks faced a setback as their arbitration claims against RailTel Corporation of India were rejected. The case revolved around the controversial termination of a content-on-demand (COD) agreement by the public sector undertaking (PSU).

According to a regulatory filing, the arbitration tribunal, formed to deliberate on the dispute, denied Zee's claims of wrongful contract termination and rejected RailTel's counterclaims. This outcome followed Zee's assertion that RailTel wrongfully forfeited substantial amounts related to the COD agreement.

ZEEL had earlier disclosed the contract's termination in November 2021. Now, in light of the tribunal's decision, the company is evaluating potential legal avenues, including an appeal to overturn the current arbitral award.

(With inputs from agencies.)