Delhi HC issues notice to ZEEL on Aditya Birla Finance petition

The Delhi High Court has reportedly issued a notice to Zee Entertainment Enterprises Ltd (ZEEL) in response to a petition filed by Aditya Birla Finance Ltd (ABFL), which has challenged an arbitral tribunal’s order dismissing its claims against ZEEL. The matter is scheduled for a hearing on October 15, 2025.

The dispute relates to a Rs 134 crore term loan extended by ABFL in 2017 to Siti Networks, an Essel Group company. ABFL argued that a Letter of Comfort (LoC) issued by ZEEL in connection with the loan amounted to a financial guarantee, making ZEEL liable for repayment of Rs 174.57 crore, including interest. In the alternative, ABFL reportedly sought a refund of Rs 108 crore that Siti Networks had paid to ZEEL in the 2020-21 financial year.

According to the media reports, ZEEL contested these claims, stating that the LoC was not a guarantee and that payments from Siti Networks were part of routine business transactions under interconnection agreements and TRAI rules.

On May 12, 2025, an arbitral tribunal led by former Supreme Court judge Justice L. Nageswara Rao rejected ABFL’s claims, affirming ZEEL’s position that the LoC did not amount to a financial guarantee, as per the media reports. The tribunal also noted ABFL was entitled to a refund of stamp duty on the LoC under the Maharashtra Stamp Act. ZEEL’s counterclaim of Rs 15 crore was reportedly left unresolved, with both parties allowed to pursue remedies before the National Company Law Appellate Tribunal (NCLAT).

While hearing the petition, the Delhi High Court reportedly stayed a portion of the tribunal’s order that allowed Siti Networks’ resolution professional to withdraw Rs 23.8 crore deposited with the tribunal registry. The court noted that Siti Networks had been removed from the arbitration proceedings due to insolvency, and neither ZEEL nor ABFL had an opportunity to challenge the withdrawal.

In a regulatory filing, ZEEL reportedly said the dispute does not involve its management, promoters, or controlling entities, and clarified that no settlement has been reached. It added that there are no financial implications or penalties arising at this stage.