HC refuses to restrain MCA from conducting T20 Mumbai League over franchise dispute

The plea was filed by Jupicos Entertainment Pvt Ltd, a special purpose vehicle (SPV) that owns the Shivaji Park Lions

MUMBAI: The Bombay high court on Wednesday refused to restrain the Mumbai Cricket Association (MCA) from conducting further editions of the T20 Mumbai League without one of the teams, Shivaji Park Lions, whose contract was terminated in 2020 for allegedly defaulting on payments.

Mumbai, India - Aug. 28, 2015 : Bombay High Court : ( Photo by Bhushan Koyande )

A division bench of chief justice Alok Aradhe and justice MS Karnik disposed of the plea filed by Jupicos Entertainment Pvt Ltd, a special purpose vehicle (SPV) that owns the Shivaji Park Lions, and refused to interfere with a single-judge bench’s decision in April to deny the petitioner interim relief. The single-judge bench had cited an “inordinate delay” of five years in challenging the MCA’s 2020 termination order.

Jupicos was formed in 2018, after a consortium of Juniper City Developers (India) Ltd (JCDIL) and Cosmos Prime Projects Limited (CPPL) successfully bid for a team representing Mumbai South Central for the first five editions of the league. The consortium formed an SPV to operate the team, with JCDIL and CPPL having an 85% and 15% shareholding, respectively.

In its petition, Jupicos claimed that it suffered huge losses in the second edition of the league in 2019. The company said it transferred its entire participation fee of ₹5.6 crore to the MCA, but received an income of only ₹3.7 crore, including GST. Jupicos claimed it did not receive any sponsorship fee from the league.

In November 2019, Probability Sports (India) Pvt Ltd, a company that operates the T20 Mumbai League for the MCA, issued a notice alleging that Jupicos had defaulted on a payment of around ₹35 lakh towards the participation fee for the league’s second edition. It also failed to deposit a tax deducted at source (TDS) amount of ₹68.4 lakh for two financial years with respect to the first edition, the company claimed. Following this, a termination notice was served to Jupicos in January 2020.

Jupicos filed an arbitration petition in the Bombay high court in March, seeking temporary injunction to restrain the MCA from conducting any further editions of the league without the Shivaji Park Lions.

Senior advocate Vivek Tankha, representing the petitioner, told the court that after the termination notice was issued, Jupicos had held meetings with the respondents, wherein it maintained that it was willing to pay the amount due after it received the sponsorship fee.

He added that other team owners were also facing a financial crunch and had defaulted on payments, but only Jupicos was singled out for differential treatment “in bad faith”. In response, the MCA's lawyers, senior advocate Ashish Kamat, along with advocate Rajesh Vanjara of SK Legal Associates, contended that the termination was valid and in line with the legal framework.

However, the court denied interim relief to Jupicos, citing a delay of over five years in filing an appeal against the termination notice. It also observed that Jupicos never challenged the termination notice. As a result, the court said, the MCA’s contention that it had waived the breach by addressing correspondence, etc., to it is prima facie plainly untenable.

The bench observed that Jupicos’s contract with Probability Sports was entirely independent, with the MCA only acting as the confirming party. Stating that the termination notice is not disputable, the bench ruled that the agreement was clearly determinable, with no proprietary rights conferred upon Jupicos.

The court upheld an earlier order passed by a single-judge bench, noting that the company’s belated approach to seek interim relief was unsatisfactory. “Having perused the order of the learned single judge, we find no reason to interfere with the same…,” the court said.

As for the losses suffered by Jupicos, the court ruled that the company can claim damages in case the termination notice is held to be illegal.