Sony Approaches Delhi High Court Seeking Outstanding Amount Of Rs 31 Crores From MX Player

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MX Player agreed to distribute Sony's copyrighted content for a fee. However, Sony alleged that MX Player failed to pay as per invoices, resulting in an outstanding amount exceeding Rs. 31 Crores

The Delhi High Court, on Monday, heard an application filed by Sony Entertainment against MX Media to settle an outstanding amount exceeding Rs. 31 Crores for distributing Sony’s content on their platform. 

The bench of Justice Pratibha M Singh directed MX Player to respond by July 15, 2024, along with the reconciled statement of accounts.

Culver Max Entertainment Pvt. Ltd. (formerly Sony Pictures Networks Pvt. Ltd.) filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996. The petition stemmed from a distribution agreement made on December 29, 2021, between Sony Pictures Networks India Private Limited (now Culver Max Entertainment Private Limited) and MX Media & Entertainment Pte. Ltd.

Sony also informed the court that one of MX Player's creditors had applied for the company's winding up in the High Court of the Republic of Singapore. Initially, the court allowed the winding-up, but later suspended the order until June 20, 2024, to enable MX Player to explore selling its business.

Represented by Senior Advocate Gaurav Pachnanda, Sony argued that MX Player, along with Respondent No. 2 and 3, constituted a single economic entity. The Respondents collectively sought to overturn the liquidation order of MX Player in Singapore courts.

However, Senior Advocates Rajiv Nayyar and Jayant Mehta, representing MX Player, contended that while liquidation proceedings were ongoing in Singapore, there was a potential for MX Player to engage in a sale transaction for its assets and businesses with a third party. An adjournment was requested to allow for the execution of this agreement and for the Respondents to present their stance at the subsequent hearing.

The court recognized the statement put forth by the Senior Counsels representing the Respondents, indicating a clear possibility of a transaction occurring between MX Player and a third party, wherein the assets of the Respondents would be transferred to this third party entity. 

The court issued a directive that in the event of any sale of assets of MX Player company, a minimum amount of Rs. 31.25 Crores must be retained by the MX Player/ in their bank accounts until further instructions are provided by the Court.

Consequently, the court decreed that the reconciled statement of accounts must be submitted along with a response. Moreover, if deemed necessary, following the completion of the transaction between MX Player and the aforementioned third party within the next two weeks, representatives from both parties are authorized to convene a reconciliation meeting. 

The court directed that a response must be filed by July 15, 2024, and any subsequent replies are to be submitted within four weeks thereafter. Accordingly, the court listed the matter for August 28, 2024.

Case Title: Culver Max Entertainment v MX Media and Entertainment Pte. Ltd