New Delhi: The National Company Law Appellate Tribunal (NCLAT) has granted a reprieve to Sporta Technologies, the parent company of the popular fantasy sports platform Dream11, by staying the order of the National Company Law Tribunal (NCLT) Mumbai that had initiated the corporate insolvency resolution process (CIRP) against it. The NCLAT has also restrained the interim resolution professional (IRP) appointed by the NCLT from taking any further steps in the CIRP until the next hearing, which is scheduled for February 23.
The NCLT had admitted an insolvency plea filed by Reward Solutions, an operational creditor of Sporta Technologies, alleging that the latter had defaulted on a license fee of Rs 7.61 crore for leasing office space in Mumbai. The NCLT had also suspended the board of directors of Sporta Technologies and appointed Madan Bajrang Lal Vaishnav as the IRP to manage the affairs of the company.
Sporta Technologies had challenged the NCLT order in the NCLAT, claiming that the debt was disputed and that the CIRP could not be initiated against it under Section 10A of the Insolvency and Bankruptcy Code (IBC), which had suspended the initiation of insolvency proceedings for defaults arising during the Covid-19 pandemic. The company had also raised questions over the ownership of the leased premises and the validity of the agreement with Reward Solutions, which itself is undergoing insolvency resolution.
Sporta Technologies had also sought an urgent stay of the NCLT order, citing the upcoming season of the Indian Premier League (IPL) T20 cricket league, of which Dream11 is the title sponsor. The company had argued that any action by the IRP would adversely affect its preparations and operations for the IPL.
The NCLAT, after hearing the arguments of both sides, issued notice to the IRP of Sporta Technologies and the resolution professional of Reward Solutions and directed them to file their reply within a week. The NCLAT also upheld the NCLT order and asked the IRP not to take any further steps in the CIRP till the next date of hearing.
The NCLAT order is a significant relief for Sporta Technologies, which operates Dream11, one of the most successful online gaming platforms in India. Dream11, which has over 100 million users, became the first Indian gaming company to achieve unicorn status in 2019. The company has also been involved in various sports sponsorships, including the IPL, the International Cricket Council (ICC), and the Indian Super League (ISL).
