BCCI faces setback in Kochi Tuskers case: Bombay HC upholds Rs 538 crore arbitration awards to defunct IPL franchise
The Bombay High Court dismissed the BCCI's pleas and ruled that the arbitrator's findings in the Kochi Tuskers case were based on an accurate assessment of evidence.
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On Tuesday, June 17, the Bombay High Court dismissed the Board of Control for Cricket in India’s (BCCI) pleas challenging two arbitration awards worth over INR 538 crore granted in favour of the now-defunct Indian Premier League (IPL) franchise Kochi Tuskers Kerala. The franchise was in operation for only one year in the IPL in 2011. This was the fourth edition of the cash-rich league.
The franchise featured in the tournament under a consortium led by Rendezvous Sports World (RSW) and operated by Kochi Cricket Private Limited (KCPL). Indignant following the “wrongful” termination, RSW and KCPL began arbitration proceedings, and on June 22, 2015, the arbitral tribunal awarded over INR 384.83 crore to KCPL and over INR 153.34 crore to RSW, along with interest and costs.
Upholding the awards, a single-judge bench of Justice Riyaz I Chagla dismissed the two petitions by India's cricket governing body. The petition against KCPL concerned an award related to disputes that emerged from its franchise agreement with the BCCI, dated March 12, 2011. The challenge to the award in favour of RSW was related to disputes that came to light from its agreement with the BCCI, dated April 11, 2010.
According to the bench, the BCCI, alleging that the awards were perverse, sought the court to going the fact-finding route by revisiting the record and accepting competing interpretations of various clauses of the agreements between the parties.
“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,” Justice Chagla noted.
“The conclusion of the learned Arbitrator namely that BCCI had wrongfully invoked the bank guarantee which amounted to a repudiatory breach of the KCPL-FA would call for no interference under Section 34 of the Arbitration Act considering that this is based on a correct appreciation of the evidence on record,” Justice Chagla added.
As per the franchise agreement, KCPL had to produce a bank guarantee by March 2011, but the firm failed to do so. KCPL referred to the non-availability of a brand-new stadium in Kochi, shareholding approvals, and an unforeseen reduction in the number of IPL games.
The BCCI, via senior advocate Rafique Dada, argued that the tribunal’s “finding that the non-availability of a brand-new stadium at Kochi was a breach on the part of BCCI is ex-facie materially contrary to the terms of governing contracts/documents”.
The cricket board also claimed that the tribunal acted “beyond the terms of contract” and KCPL’s failure to provide a bank guarantee was a significant breach of the franchise agreement. The BCCI alleged that the damages awarded for loss of profits and wasted expenditure were in excess of the agreement.
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However, senior advocate Vikram Nankani, representing the respondents KCPL and RSW, opposed the BCCI’s plea, claiming that the termination was unjustified and disproportionate.
Justice Chagla, after looking closely at the submissions, held that the arbitrator’s conclusion was supported by the records.
Kochi finished eighth out of 10 teams in IPL 2011. Mahela Jayawardene, the current head coach of the Mumbai Indians, led Kochi. They won six matches and lost eight.
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