ZEEL Counterclaims Star India for $8 Mn in the ICC TV Rights Dispute

Zee Entertainment Enterprises Limited (ZEEL) has counterclaimed against Star India, which is supported by Reliance Industries Limited (RIL), for $8 million plus interest. The unsuccessful International Cricket Council (ICC) contract, which is presently being arbitrated at the London Court of International Arbitration (LCIA), is the subject of Star's $940 million damages claim.

The Rs 69 crore that ZEEL paid to Star in accordance with the terms of the contract is the subject of the counterclaim.

According to ZEEL's regulatory filing, arbitration is still in its early stages and the LCIA has not yet decided whether ZEEL is liable for alleged violations of the Alliance Agreement with Star.

On December 23, 2024, ZEEL filed its statement of defense, denying all of Star's allegations. The LCIA has established a three-person arbitral panel to manage the conflict. Star submitted its statement of case, along with a witness statement and a damages expert report, on September 16, 2024.

The Alliance Agreement, which Star agreed to sublicense TV broadcasting rights for ICC men's cricket events from 2024 to 2027 to ZEEL, was signed on August 26, 2022, and is the source of the dispute.

Following ZEEL's withdrawal from the deal, the $3 billion ICC media rights were acquired by Star, which was then fully owned by Walt Disney. With Walt Disney and Bodhi Tree Systems as additional shareholders, RIL currently owns the majority.

In addition to citing additional obligations totaling Rs 17 crore for bank guarantee commission and deposit interest, Star claims ZEEL failed to pay the first installment of $203.56 million (Rs 1,693 crore), which is now primarily owned by RIL, with Walt Disney and Bodhi Tree Systems as other shareholders.

In March 2024, Star filed for arbitration, requesting damages or the agreement's enforcement. Star ended the contract in June 2024 and concentrated only on pursuing damages. In response, ZEEL demanded a reimbursement of Rs 69 crore, claiming that Star's noncompliance rendered the contract null and void.

Citing the strength of its legal position, ZEEL stated that it is certain the dispute will not have a major impact on its operations or finances.

According to the statement, the board of the company is still keeping an eye on the situation and thinks the company has good reason to refute any allegations made by Star.

ZEEL had previously claimed that the ICC agreement could not go forward because of unmet prerequisites, such as guarantees, financial commitments, and ICC approval for the sub-licensing agreement.

The eventual failure of ZEEL's planned merger with Sony Pictures Networks India also had an impact on the ICC agreement.

According to a regulatory filing, Star India's standalone net loss for the fiscal year that ended on March 31, 2024, was Rs 12,548 crore, mostly because of a Rs 12,319 crore provision for a "onerous contract" associated with the ICC media rights agreement.