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Indian Express
2 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.
India Today
3 days ago
- Business
- India Today
BCCI loses Rs 538 crore arbitration case to defunct IPL team Kochi Tuskers
The Bombay High Court on Tuesday dismissed two petitions filed by the Board of Control for Cricket in India (BCCI), challenging arbitration awards that directed it to pay over Rs 538 crore to the now-defunct IPL franchise Kochi Tuskers judgment comes as a major setback for the cricket board, which has been contesting the award for nearly a RI Chagla, while pronouncing the verdict, said there was no patent illegality in the 2015 arbitration order that warranted interference from the High Court. However, the court granted BCCI two more weeks to appeal against the ruling. The court noted that the awards had been under conditional stay for several years and extended the time to allow the Kochi Tuskers to initiate recovery of the awarded case dates back to disputes arising from franchise agreements that Kochi Cricket Private Limited (KCPL) and Rendezvous Sports World (RSW) had entered into with the BCCI. RSW had won the bid for the Kochi IPL franchise in 2010, submitting a bank guarantee of Rs 153.34 an interim franchise agreement was signed in April 2010, it was later transferred to KCPL in November that year following the creation of the joint began after KCPL allegedly failed to deliver the requisite bank guarantee by March 2011. BCCI subsequently terminated the franchise agreements with KCPL and RSW on September 19, 2011. In response, the Kochi franchise owners invoked arbitration in June 2015, the arbitrator directed BCCI to pay KCPL Rs 385.5 crore along with 18 percent annual interest. In RSW's case, BCCI was ordered to pay Rs 153.34 crore with similar interest terms, beginning from the date of the alleged wrongful termination of the represented by senior advocate Rafiq Dada, argued that the arbitrator had overlooked key clauses related to deadlines for submission of guarantees and changes to contract terms. However, the High Court said the arbitrator had correctly interpreted the evidence and contractual terms.'The conclusion of the arbitrator that BCCI had wrongfully invoked the bank guarantee, amounting to a repudiatory breach, calls for no interference,' Justice Chagla court held that the arbitration findings were well reasoned and that the challenge raised by the BCCI lacked Watch
Mint
3 days ago
- Business
- Mint
Bombay High Court upholds ₹538 cr award to defunct Kochi IPL franchise against BCCI
In a major blow to the Board of Control for Cricket in India (BCCI), the Bombay High Court has upheld an arbitral award of over ₹ 538 crore in favour of the now-defunct Indian Premier League (IPL) franchise Kochi Tuskers Kerala. The ruling passed on Tuesday (17 June) comes in a long-standing dispute over the team's abrupt termination from the Indian Premier League fourteen years ago. A single-judge bench of Justice R.I. Chagla dismissed BCCI's challenge to the award, ruling that the court could not re-examine the merits of the arbitral tribunal's conclusions. '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 observed. 'The arbitrator's conclusion that the BCCI's termination of the Kochi franchise was a repudiatory breach of contract would call for no interference… this is based on a correct appreciation of the evidence on record.' The court further held that BCCI, by continuing to deal with the franchise and accepting payments, had effectively waived the strict requirement for furnishing a fresh bank guarantee by the March 2011 deadline. It also dismissed BCCI's objections under the Indian Partnership Act and upheld the validity of arbitration proceedings initiated by Kochi Tuskers Kerala co-owner Rendezvous Sports World (RSW). Finding no patent illegality or jurisdictional error, the court allowed Kochi Cricket Pvt. Ltd (KCPL) and RSW to withdraw ₹ 100 crore deposited earlier by BCCI. The cricketing body has been granted six weeks to file an appeal, likely before the division bench of the high court or the Supreme Court. The Kochi IPL franchise was awarded in 2010 for ₹ 1,550 crore, with payments scheduled over a 10-year period. But the team, backed by a consortium led by RSW and operated by KCPL, played only the 2011 season. Its ownership included Anchor Earth Pvt. Ltd. (31.45%), Parinee Developers Pvt. Ltd. (30.27%), Rendezvous Sports World (10%), Anand Shyam Estates (9.31%), and Vivek Venugopal (5%). In 2011, the franchise failed to furnish a fresh 10% bank guarantee of around ₹ 156 crore for the upcoming season, citing internal ownership disputes, venue availability concerns, and regulatory delays. BCCI, while invoking an existing ₹ 153 crore guarantee, demanded a new one within six months. In September 2011, BCCI terminated the franchise agreement and encashed the earlier guarantee. RSW and KCPL initiated arbitration proceedings in 2012, arguing that the termination was wrongful and that BCCI's conduct showed a continued willingness to work with the franchise despite the guarantee delay. In 2015, a tribunal led by former Supreme Court Chief Justice R.C. Lahoti ruled in favour of the franchise, awarding ₹ 384 crore to KCPL as compensation for loss of profits and directing BCCI to return ₹ 153 crore to RSW with interest and costs. BCCI challenged the award in the Bombay High Court, arguing that the tribunal had exceeded its jurisdiction and had awarded excessive damages in violation of contractual limits. It also questioned the locus of RSW under the Partnership Act. In 2018, the High Court granted a temporary stay on the award, prompting the Kochi franchise to approach the Supreme Court, which directed BCCI to deposit ₹ 100 crore as a condition for continued stay. With Tuesday's ruling, the Bombay High Court has now upheld the award, leaving BCCI with the option of challenging the decision. The Kochi case is one among several high-stakes legal battles involving terminated IPL franchises. In 2012, BCCI terminated the Deccan Chargers over financial defaults. An arbitrator later awarded the team ₹ 4,814 crore for wrongful termination. However, the Bombay High Court set aside the award in 2021, capping BCCI's liability at ₹ 34 crore plus interest. Similarly, Pune Warriors India, owned by Sahara Adventure Sports, was terminated in 2013 after failing to submit a ₹ 170.2 crore bank guarantee. That matter also led to legal proceedings. Despite these setbacks, IPL continues to grow in commercial strength. According to the Brand Finance IPL 2024 valuation report, the league's cumulative brand value rose 13% to $12 billion. From a $2 billion valuation in 2009, it crossed the $10 billion mark in 2023.
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Business Standard
3 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.
Mint
3 days ago
- Business
- Mint
Bombay High Court upholds ₹538 cr award to defunct Kochi IPL franchise against BCCI
In a major blow to the Board of Control for Cricket in India (BCCI), the Bombay High Court has upheld an arbitral award of over ₹ 538 crore in favour of the now-defunct Indian Premier League (IPL) franchise Kochi Tuskers Kerala. The ruling passed on Tuesday (17 June) comes in a long-standing dispute over the team's abrupt termination from the Indian Premier League fourteen years ago. A single-judge bench of Justice R.I. Chagla dismissed BCCI's challenge to the award, ruling that the court could not re-examine the merits of the arbitral tribunal's conclusions. '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 observed. 'The arbitrator's conclusion that the BCCI's termination of the Kochi franchise was a repudiatory breach of contract would call for no interference… this is based on a correct appreciation of the evidence on record.' The court further held that BCCI, by continuing to deal with the franchise and accepting payments, had effectively waived the strict requirement for furnishing a fresh bank guarantee by the March 2011 deadline. It also dismissed BCCI's objections under the Indian Partnership Act and upheld the validity of arbitration proceedings initiated by Kochi Tuskers Kerala co-owner Rendezvous Sports World (RSW). Finding no patent illegality or jurisdictional error, the court allowed Kochi Cricket Pvt. Ltd (KCPL) and RSW to withdraw ₹ 100 crore deposited earlier by BCCI. The cricketing body has been granted six weeks to file an appeal, likely before the division bench of the high court or the Supreme Court. The Kochi IPL franchise was awarded in 2010 for ₹ 1,550 crore, with payments scheduled over a 10-year period. But the team, backed by a consortium led by RSW and operated by KCPL, played only the 2011 season. Its ownership included Anchor Earth Pvt. Ltd. (31.45%), Parinee Developers Pvt. Ltd. (30.27%), Rendezvous Sports World (10%), Anand Shyam Estates (9.31%), and Vivek Venugopal (5%). In 2011, the franchise failed to furnish a fresh 10% bank guarantee of around ₹ 156 crore for the upcoming season, citing internal ownership disputes, venue availability concerns, and regulatory delays. BCCI, while invoking an existing ₹ 153 crore guarantee, demanded a new one within six months. In September 2011, BCCI terminated the franchise agreement and encashed the earlier guarantee. RSW and KCPL initiated arbitration proceedings in 2012, arguing that the termination was wrongful and that BCCI's conduct showed a continued willingness to work with the franchise despite the guarantee delay. In 2015, a tribunal led by former Supreme Court Chief Justice R.C. Lahoti ruled in favour of the franchise, awarding ₹ 384 crore to KCPL as compensation for loss of profits and directing BCCI to return ₹ 153 crore to RSW with interest and costs. BCCI challenged the award in the Bombay High Court, arguing that the tribunal had exceeded its jurisdiction and had awarded excessive damages in violation of contractual limits. It also questioned the locus of RSW under the Partnership Act. In 2018, the High Court granted a temporary stay on the award, prompting the Kochi franchise to approach the Supreme Court, which directed BCCI to deposit ₹ 100 crore as a condition for continued stay. With Tuesday's ruling, the Bombay High Court has now upheld the award, leaving BCCI with the option of challenging the decision. The Kochi case is one among several high-stakes legal battles involving terminated IPL franchises. In 2012, BCCI terminated the Deccan Chargers over financial defaults. An arbitrator later awarded the team ₹ 4,814 crore for wrongful termination. However, the Bombay High Court set aside the award in 2021, capping BCCI's liability at ₹ 34 crore plus interest. Similarly, Pune Warriors India, owned by Sahara Adventure Sports, was terminated in 2013 after failing to submit a ₹ 170.2 crore bank guarantee. That matter also led to legal proceedings. Despite these setbacks, IPL continues to grow in commercial strength. According to the Brand Finance IPL 2024 valuation report, the league's cumulative brand value rose 13% to $12 billion. From a $2 billion valuation in 2009, it crossed the $10 billion mark in 2023. The $16 billion IPL, which was started in 2007, is the world's biggest T20 cricket league and the world's second-largest sports league, behind the US's century-old National Football League (NFL).
