Judge Christina Snyder, of the U.S. District Court for the Central District of California, issued a temporary injunction against the transaction of Societe Generale SA (PINK:SCGLY) (EPA:GLE) to sell its 65 percent stake in TCW Group to the Carlyle Group LP (NASDAQ:CG), which was expected to close in the first quarter of 2013, according to the report from Reuters.

societe generale

The federal judge ruled in favor of EIG Global Energy Partners LLC, which filed a lawsuit to stop the sale of TCW. EIG was divested by TCW in 2011. The company claimed that the agreement between TCW and Carlyle Group LP (NASDAQ:CG) violates some of the contractual rights granted by TCW, as part of the divestiture.

EIG and TCW have an existing joint-venture agreement. Under the agreement, EIG has the right to approve any change of control or ownership that would affect the joint venture. Carlyle’s energy funds and the EIG fund are competitors. As of June 2012, Carlyle’s energy funds has $16 billion in assets under management, while EIG funds has $10.6 billion in assets under management.

TCW has the chance to submit evidence and convince the court that it did not violate any of its contractual agreements with EIG. If the asset manager fails, Judge Snyder could finalize her decision to block the sale.

EIG was pleased with Judge Snyder’s tentative ruling. A spokesperson for EIG said, “We are very pleased by the tentative ruling and look forward to it becoming finalized. We will have more to say once that has happened.”

On the other hand, Peter Viles, spokesperson for TCW, said the company aims to resolve EIG’s complaint as soon as possible through arbitration, in order to be able to complete its deal with Carlyle. Viles said, “We look forward to a prompt resolution of these narrow issues involving EIG through arbitration, and we remain fully committed to moving forward with the Carlyle Group LP (NASDAQ:CG) transaction in a timely fashion.”

TCW’s legal counsel, Thomas Jerome Nolan, of Skadden Arps Slate Meagher and Flom LLP, issued an e-mail statement to Reuters stating that the company will submit additional evidence to the court. According to him, if Judge Snyder decides to finalize the injunction, she would possibly consider narrowing its scope.

Judge Snyder is expected to issue a final ruling on the injunction of the transaction a few days after the submission of evidence.