Bombay HC sets aside order directing BCCI to pay ₹4,800 crore to DCHL

In a major relief for the Board of Control for Cricket in India (BCCI), the Bombay high court (HC) on Wednesday set aside an arbitral order which directed it to pay ₹4,800 crore to Deccan Chronicle Holding Ltd (DCHL) in lieu of the termination of the Deccan Chargers team franchise in the Indian Premier League (IPL)

In a major relief for the Board of Control for Cricket in India (BCCI), the Bombay high court (HC) on Wednesday set aside an arbitral order which directed it to pay ₹4,800 crore to Deccan Chronicle Holding Ltd (DCHL) in lieu of the termination of the Deccan Chargers team franchise in the Indian Premier League (IPL).

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BCCI had challenged the July 2020 order by the arbitrator on the grounds that its conclusion about the termination being illegal was based on wrong contractual and perverse interpretation of the contract and the method of computation to arrive at the figure was not mentioned in the order.

The single judge bench of justice Gautam Patel, while hearing the appeal by the BCCI against the July 2020 order of the sole arbitrator who was appointed in 2012 to ascertain whether BCCI’s termination notice to Deccan Chargers was illegal, was informed by solicitor general Tushar Mehta, for BCCI, that the condition of the contract for payment to players, support staff etc. had been substantially complied with, but the tribunal proceeded contrary to the facts while declaring the termination to be bad.

In 2012, DCHL was declared a successful bidder for the Deccan Chargers team franchise and an agreement was drawn between Deccan Chargers and BCCI for 10 years. However, in August 2012, BCCI issued a show-cause notice for termination of Deccan Chargers to DCHL. The termination was confirmed a day before expiry of the 30-day period granted to respond to the notice.

Aggrieved by the termination, DCHL had approached the HC and sought compensation as per the contract clauses. In September 2012, HC had appointed retired Supreme Court judge justice CK Thakker as the sole arbitrator to decide the dispute.

In July 2020, justice Thakker passed the award in favour of DCHL, directing BCCI to pay ₹4,800 crore to DCHL plus interest and held the termination of franchise illegal. The amount included damages of over ₹600 crore and compensation of nearly ₹4,150 crore. Thereafter, BCCI challenged the order in HC.

In his submissions, Mehta informed the court that the tribunal committed serious error in awarding ₹4,150 crore without assigning any reasons or method of computation to arrive at this figure. He had added that the tribunal virtually entered into the area of re-writing the contract while holding that BCCI should have paid the players and other support staff.

He also submitted that BCCI had gone by the clauses of the contract and the termination was effected on expiry of the curing period, hence the conclusion of the tribunal of the termination being illegal was based on wrong and perverse interpretation of clause 11 of the contract.

The HC imposed a cost of ₹10 lakh on DCHL and directed BCCI to pay nearly ₹34 crore to DCHL with interest.