Latest news with #ArbitrationandConciliationAct
Indian Express
3 days ago
- Business
- Indian Express
Why Bombay HC upheld arbitral awards directing BCCI to pay over Rs 538 crore to Kochi Tuskers Kerala owners
The Bombay High Court on Tuesday (June 17) rejected two pleas by the Board of Control for Cricket in India (BCCI) to quash the arbitral awards of over Rs 538 crore granted to owners of Kochi Tuskers Kerala, the now-defunct Indian Premier League (IPL) franchise. The two companies are Rendezvous Sports World (RSW), which was co-owned by Sunanda Pushkar, the late wife of Congress leader Shashi Tharoor, and Kochi Cricket Private Limited (KCPL). As reported by The Indian Express earlier, Pushkar had in April 2010 surrendered her shares in RSW. The dispute and legal trail that reached Bombay HC The Bombay HC passed a verdict on two pleas filed by BCCI challenging arbitral awards passed on June 22, 2015. Kochi Tuskers took part in only one season of the IPL in 2011, under a consortium led by RSW and later operated by KCPL. The dispute arose after the BCCI terminated the franchise in September 2011, citing an alleged breach of agreement. The agreement was signed between BCCI and RSW on April 11, 2010, pending the incorporation of the joint venture company KCPL. The KCPL had entered into an agreement with the BCCI on March 12, 2011. On September 19, 2011, the BCCI wrote to KCPL and RSW and terminated agreements with them, claiming that the two firms had failed to deliver the requisite bank guarantee on or before March 2011. The aggrieved firms initiated arbitration proceedings against the termination. On June 22, 2015, the arbitrator directed BCCI to pay Rs 384.83 crore to KCPL along with interest at the rate of 18 % from date of termination in 2011 till the date of award. Through another decision passed on the same day, the arbitrator directed BCCI to pay Rs 153.34 crore to RSW together with 18 % interest from the date of termination until the date of the arbitral award. In total, the arbitrator ordered an award of Rs 538.17 crore in favour of Kochi IPL franchise owners. Three months later, the cricketing body challenged the two awards before the Bombay High Court under section Section 34 of the Arbitration and Conciliation Act, 1996. Based on the BCCI's interim plea, the High Court in April 2018 granted unconditional stay on the award in favour of KCPL, which the Supreme Court next month modified and directed the BCCI to deposit Rs 100 crore in the court. The High Court in April 2018, while dealing with the BCCI's challenge of the award in favour of RSW, had passed an order of stay on a condition that the BCCI deposited 50% of the awarded amount with interest. BCCI's contentions The BCCI argued that the arbitral awards were 'contrary to the agreements, patently illegal and prejudicial to the cricket board's rights.' The Board said that the arbitrator's observation that the non-availability of a brand new stadium in Kochi — which the team owners had cited as one reason why they could not get the bank guarantee — was a breach on the part of BCCI was 'ex facie materially contrary to the terms of governing contracts/documents'. The BCCI argued that the KCPL had requested that they be allowed to play at Jawaharlal Nehru Stadium in Kochi till Kerala Cricket Association made an alternative site for the new stadium. The BCCI also addressed the matter of then IPL commissioner Lalit Modi putting out tweets about Pushkar and others' ownership of Kochi Tuskers. It argued that the arbitrator's finding that the Board was bound by the consequences flowing from the tweets, made in April 2010, was 'erroneous.' The Board said that Modi's posts were made in his personal capacity and there was no evidence to suggest he made those posts in the course of his duties as the Chairman of the Governing Council of the IPL. It said that the KCPL raised the issue for the first time in 2012 as an 'afterthought'. The BCCI further claimed that the KCPL's failure to provide the bank guarantee was a breach of the franchise agreement and the damages awarded to the owners of the team for loss of profits and wasted expenditure were in excess of the agreements, and as the arbitrator acted 'beyond the terms of the contract,' the impugned decisions were flawed and should be set aside. The respondents KCPL and RSW claimed that the termination of the franchise was 'wrongful, malafide' and was done 'without giving reasonable notice to remedy the so-called breach' by them. They submitted that the time of furnishing guarantee was extended from time to time by the BCCI but abruptly brought to an end, which was unjust. For failing to furnish the bank guarantee by March 2011, the KCPL referred to the non-availability of a new stadium in Kochi, shareholding approvals, and a sudden reduction in the number of IPL matches. They further argued that the arbitrator rightly concluded that the BCCI had wrongfully invoked the bank guarantee, which amounted to 'repudiatory breach' of the franchise agreement. High Court ruling A single-judge Bench of Justice Riyaz I Chagla in its June 18 verdict held that the 'BCCI's dissatisfaction as to the findings rendered in respect of the evidence and/or the merits cannot be a ground to assail the Award.' What next The HC has permitted the KCPL and RSW to withdraw amounts deposited by the BCCI after six weeks. The HC had initially allowed withdrawal after four weeks. But on BCCI's request, so as to file an appeal before the Supreme Court, Justice Chagla extended the period by another two weeks.
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Business Standard
4 days ago
- Business
- Business Standard
Bombay HC upholds ₹538 cr Kochi Tuskers arbitral award against BCCI
Bombay HC dismisses BCCI's appeal and upholds arbitral award over wrongful termination of Kochi Tuskers; franchise partners KCPL and RSW to receive ₹538.84 crore New Delhi The Bombay High Court has upheld an arbitral award directing the Board of Control for Cricket in India (BCCI) to pay ₹385.50 crore to Kochi Cricket Private Limited (KCPL) and ₹153.34 crore to Rendezvous Sports World (RSW) in connection with the Kochi IPL (Indian Premier League) franchise. Kochi Tuskers Kerala participated in the 2011 season of the IPL under a consortium led by RSW and operated by KCPL. However, the BCCI terminated the team's contract the following year, citing breach of the franchise agreement. Following the termination, RSW and KCPL initiated arbitration proceedings against the BCCI, alleging wrongful termination of their franchise agreement. On 22 June 2015, the arbitral tribunal awarded KCPL over ₹384.83 crore and RSW ₹153.34 crore, along with interest and costs. The BCCI subsequently approached the Bombay High Court seeking to set aside the tribunal's award. Justice Chagla also held that the court would not interfere with the award even on grounds of an allegedly incorrect interpretation by the arbitrator. 'The learned arbitrator has, in the impugned KCPL and RSW awards, decided the core issue—viz., whether BCCI wrongfully invoked the bank guarantee furnished by RSW and whether this amounted to a repudiatory breach of the KCPL-FA—by considering the material facts, documents on record, and recorded evidence,' the order stated. The order further added: 'The learned arbitrator has also considered whether the non-furnishing of a bank guarantee by KCPL by 22 March 2011 constituted an 'irremediable material breach' of both the KCPL and RSW franchise agreements. The impugned awards conclude that the material on record militated against a finding of irremediable material breach.' The court held that the arbitrator's conclusion—that BCCI had wrongfully invoked the bank guarantee—required no interference under Section 34 of the Arbitration and Conciliation Act, 1996. This section outlines the grounds and procedures for setting aside an arbitral award in India.
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Business Standard
4 days ago
- Business
- Business Standard
Kochi Tuskers vs BCCI: The IPL dispute that ended in ₹538 crore court blow
Almost 14 years after it brought the Indian Premier League (IPL) to Kerala — only to be terminated a season later — the ghost of Kochi Tuskers Kerala has returned to haunt the Board of Control for Cricket in India (BCCI), now with a legal price tag of ₹538 crore. In a significant setback for the BCCI, the Bombay High Court has upheld arbitral awards totalling ₹537.5 crore in favour of the defunct franchise's parent company, Kochi Cricket Private Ltd (KCPL), and its principal stakeholder, Rendezvous Sports World (RSW). Justice RI Chagla, delivering the verdict, dismissed the BCCI's petition under Section 34 of the Arbitration and Conciliation Act, 1996, reinforcing that courts cannot reappreciate evidence or sit in appeal over arbitral findings. 'BCCI's dissatisfaction as to the findings rendered... cannot be a ground to assail the award,' the court said. A team, a tax, a termination The Kochi franchise—one of two teams added during the BCCI's 2010 expansion — was born in controversy and proved to be short-lived. Even before it debuted in the 2011 IPL season, the consortium behind it was fighting battles on multiple fronts: infighting among shareholders, a PR disaster over its proposed name ('Indi Commandos'), and threats of relocation after disputes over Kerala's entertainment tax. Despite a middling on-field performance—six wins in 14 matches—the bigger implosion came off the field. KCPL failed to furnish a mandatory 10 per cent bank guarantee for the 2012 season, citing unresolved shareholding issues and regulatory delays. Still, BCCI continued accepting payments from the franchise well into mid-2011, creating what the court has now interpreted as an implicit waiver of strict compliance. By September 2011, the BCCI had had enough. It terminated the franchise for breach of agreement, citing non-submission of the guarantee. Players were redistributed via auction; unsold ones were paid out of an earlier bank guarantee, which the BCCI unilaterally encashed. Arbitral award, and its confirmation In 2012, KCPL and RSW moved to arbitration, claiming wrongful termination. By 2015, the arbitral tribunal ruled in their favour: ₹384 crore to KCPL for lost future profits and ₹153 crore to RSW for unjustified encashment of the bank guarantee. The BCCI challenged the award, arguing that the arbitrator exceeded his mandate and erred in awarding both profits lost and wasted expenditure—claims it said were duplicative and contrary to contract law. The Board also invoked provisions of the Indian Partnership Act to question the maintainability of RSW's claim. The High Court disagreed on every count. Justice Chagla found the arbitrator's reasoning 'based on a correct appreciation of the evidence,' and reiterated that the court's role under Section 34 is not to second-guess findings of fact or contractual interpretation, absent a glaring legal error. He further observed that the BCCI, by continuing to engage with the franchise and accept payments post-deadline, had effectively 'waived' strict enforcement of the bank guarantee clause.
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Business Standard
4 days ago
- Business
- Business Standard
BCCI loses ₹538 cr case as Bombay HC upholds Kochi Tuskers arbitration
The Bombay High Court has upheld arbitral awards worth over ₹538 crore in favour of the now-defunct Indian Premier League (IPL) franchise, Kochi Tuskers Kerala. The ruling comes more than a decade after the Board of Control for Cricket in India (BCCI) terminated the franchise's contract, citing a breach of agreement, reported Bar and Bench. Delivering the verdict on Tuesday, Justice RI Chagla rejected BCCI's plea challenging the arbitral awards, reaffirming the limited scope of judicial intervention under Section 34 of the Arbitration and Conciliation Act. The single-judge bench ruled that the court cannot function as an appellate body over the arbitrator's conclusions. 'The jurisdiction of this court under Section 34 of the Arbitration Act is very limited. BCCI's endeavour to delve into the merits of the dispute is in teeth of the scope of the grounds contained in Section 34 of the Act. BCCI's dissatisfaction as to the findings rendered in respect of the evidence and/or the merits cannot be a ground to assail the Award,' the court said. What is the dispute? The Kochi Tuskers franchise, originally awarded to a consortium led by Rendezvous Sports World (RSW), was later operated by Kochi Cricket Private Limited (KCPL). The team took part in the 2011 IPL season but was terminated by BCCI in September 2011. The reason: failure to furnish a 10 per cent bank guarantee, allegedly due to internal conflicts among the franchise owners. KCPL, however, maintained that the delay was caused by unresolved matters including stadium issues, regulatory approvals on shareholding, and a sudden reduction in the number of IPL matches. Despite these problems, the BCCI continued to engage with the franchise and even accepted multiple payments, only to cancel the contract later and encash an earlier guarantee submitted by RSW. Arbitration and award In 2012, both KCPL and RSW initiated arbitration proceedings. The tribunal, in 2015, ruled in their favour. It awarded ₹384 crore to KCPL for loss of profits and ₹153 crore to RSW for wrongful encashment of the bank guarantee—together exceeding ₹538 crore, along with interest and legal costs. BCCI had challenged the award, claiming the arbitrator exceeded his jurisdiction and misapplied legal principles. It also argued that KCPL's failure to provide the guarantee was a fundamental breach and that the damages awarded were excessive and went beyond contractual limitations. Additionally, BCCI contested the maintainability of RSW's claim under the Indian Partnership Act. What did the court say in its verdict? KCPL and RSW countered BCCI's claims by stating that the board had, through its continued interactions, effectively waived the guarantee deadline. They insisted that the franchise's termination was both unjustified and disproportionate. They also defended the tribunal's findings, calling them a fair interpretation of the evidence on record. Justice Chagla sided with the franchise. The court made it clear that the arbitrator's conclusion—that the BCCI's action amounted to a repudiatory breach of contract—did not warrant interference. 'The arbitrator's conclusion that the BCCI's termination of the Kochi franchise was a repudiatory breach of contract would call for no interference under Section 34 of the Arbitration Act,' the court held. "Just because a different view may be possible would not be a ground for interference with the award," it added. The judgment further clarified that the arbitrator rightly found that the BCCI had waived the requirement under Clause 8.4 of the Franchise Agreement regarding the bank guarantee for the 2012 season. 'Thus, based on these material facts and documents on record, the finding of the learned Arbitrator that BCCI waived the requirement under Clause 8.4 of the KCPL-FA for furnishment of bank guarantee for 2012 season on or before 22nd March, 2011 cannot be faulted,' the court added.
Time of India
5 days ago
- Business
- Time of India
Delays in Goa road projects could cost Centre crores
Panaji: Over the past few years, bridge and road projects worth over Rs 14,000 crore have been funded by the Union ministry of road transport and highways in Goa. However, some of these infrastructure projects could soon cause losses to the ministry running into hundreds of crores. Contractors of three major projects have already gone in for arbitration in three separate cases, claiming that losses of Rs 300 to Rs 500 crore each have been caused to them due to delay in the projects, sources said. The contractors have said that the delays in the project execution occurred because Goa govt was unable to complete land acquisition for the road or bridge works within the required time. 'Three separate cases are already in the process of arbitration for road and bridge stretches in Cortalim, Mormugao, and Salcete. A fourth contractor is also in the process of taking the same route for work carried out in Pernem. The contractors have said that delays in land acquisition and changes to scope of work caused due to protests have caused them losses of around Rs 400 crore each,' said the source. The contractors have said that their machinery lying idle due to the delay in the works are some of the causes for the losses to them. 'Three of the cases are in advanced stages of arbitration, and if the matter does not go in favour of the govt, then the ministry in two of the cases and Goa govt in one of the cases will have to pay a heavy amount in settlement,' said the source. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Don't Bother With An Expensive Will (Do This Instead) Local Will Finder Undo The Arbitration and Conciliation Act, 1996, allows for a streamlined system for resolving disputes outside of traditional court proceedings. 'The Act recognizes the parties' autonomy to determine the procedure for arbitration and conciliation. They agree on the terms and conditions of their dispute resolution process. Each party appoints their own arbitrator and there is a chief arbitrator, who could be a retired judge, etc,' said a source. He said that although govt has placed its say that the Covid pandemic and other factors outside its control were also causes for the delay, usually these cases do end in the party having to cough up a settlement amount as per the arbitral award. 'As three of the four projects that have gone for arbitration were tendered by the ministry, the ministry will become liable to pay the amount as per the award,' said the source.
