Japan’s Sony Group (NYSE:SONY) moved up Monday after announcing it was scrapping plans for a $10-billion merger with India’s Zee Entertainment, with both sides set to challenge each other legally over failures to close a deal that was due to reshape the country’s media landscape.

The collapse of the deal intended to create a media powerhouse in content-hungry India creates more uncertainty for TV broadcaster Zee in particular at a time when competition is heating up.

Disney (NYSE:DIS) is now seeking to merge its Indian businesses with media assets of billionaire Mukesh Ambani’s Reliance to form one of India’s biggest entertainment empires.

Sony said in a statement certain “closing conditions” to the merger were not satisfied despite “good faith discussions” with Zee, and the companies were unable to agree upon an extension by their Jan. 21 deadline.

“After more than two years of negotiations, we are extremely disappointed ... We remain committed to growing our presence in this vibrant and fast-growing market,” it added.

Zee told Indian stock exchanges Sony was seeking $90 million in termination fees for alleged breaches of the merger agreement and emergency interim relief by “invoking arbitration”. Zee said it refutes all claims made by Sony and would take appropriate legal action.

SONY shares on Wall Street improved 98 cents, or 1%, to $100.00