INDIA Law and Practice Contributed by: Anand Lakra, Shivpriya Nanda, Zain Pandit and Ami Shah, JSA Advocates & Solicitors
say no” or reject the transactions. However, the independent directors of the target have the duty to provide their reasoned recommendations on the offer (as described in section 8. Duties of Directors ) and thereby influence shareholder decisions to tender in such offers.
as part of draft definitive documentation (source: Zostel Hospitality Private Limited v Oravel Stays Private Limited and others). Documentation Stage At the documentation stage, it is not common to see litigations as any disagreements at this stage usually result in the failure of the deal. Post-Deal Stage Most disputes generally arise at the post-deal In recent years, the Indian M&A landscape has evolved through disputes, reflecting the grow - ing complexity of deals, regulatory scrutiny, and stakeholder activism. Zee-Sony Merger stage by way of indemnity claims. 10.3 “Broken-Deal” Disputes In 2021, Zee Entertainment Enterprises Lim - ited and Sony Pictures Television announced a merger of their businesses. However, the merger soon fell into dispute with Sony claiming Zee’s inability to fulfil closing obligations. Sony then instituted arbitration proceedings against Zee, seeking USD90 million as termination fees, with Zee counterclaiming and seeking a similar termi - nation fee from Sony. In late 2024, Zee and Sony reached a settlement relinquishing all claims against each other and voiding all outstanding obligations or liabilities to each other.
10. Litigation 10.1 Frequency of Litigation
Litigation with respect to M&A deals is not very common in India. A few examples where such litigation has arisen are set out in 10.2 Stage of Deal . Arbitration is one of the preferred modes of dispute resolution in Indian M&A transactions, particularly in cross-border deals where inter - national commercial arbitration is often chosen. Term sheets are the most common instruments used at the deal-making stage. Such term sheets can be binding as well as non-binding. In the case of non-binding term sheets, the mar - ket practice has evolved to incorporate certain binding commitments within non-binding term sheets for provisions such as confidentiality, exclusivity, no-shopping and dispute resolution. Court rulings in recent years have also tended to create/recognise legal consequences for non- binding term sheets, where the courts have ruled in favour of arbitrability in a non-binding term sheet in certain scenarios, eg, if the non-binding term sheet provides for a binding dispute resolu - tion clause (source: Welspun One Logistics Park Fund v Mohit Verma); and in favour of right of specific performances of obligations of other parties under a non-binding term sheet if a party has taken steps towards complying with its obli - gations, as part of either the term sheet itself or 10.2 Stage of Deal Deal-Making Stage
11. Activism 11.1 Shareholder Activism
While shareholder activism is not very com - mon in India, the Act provides the right for the shareholders to initiate class action proceedings subject to meeting certain thresholds. The year
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