BCCI asked to pay INR 538 crore to now-defunct Kochi Tuskers Kerala, have 6 weeks to file appeal
A single judge (Justice R.I. Chagla) presided on the BCCI vs Kochi Cricket Private Limited and others case, and dismissed the Indian cricket body’s challenge.
The BCCI were dealt a massive setback on Tuesday, as the Bombay High Court upheld arbitral awards exceeding ₹538 crore in favour of the owners of now-defunct IPL franchise Kochi Tuskers. A single judge (Justice R.I. Chagla) presided on the BCCI vs Kochi Cricket Private Limited and others case, and dismissed the Indian cricket body’s challenge to the arbitral awards. The judge ruled that the court could not act as an appellate authority over the arbitrator’s findings.
The court observed, “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.”
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The Kochi Tuskers franchise was first given to a consortium led by Rendezvous Sports World (RSW), and then it was later operated by Kochi Cricket Private Limited (KCPL). The team participated in only one season (IPL 2011), then the BCCI terminated the franchise in September 2011, due to a breach of franchise agreement, citing failure to furnish a 10 percent bank guarantee. It was also reported that there was also many internal disputes between owners.
Meanwhile, the KCPL stated that the delay was due to unresolved problems, which consisted of stadium unavailability, regulatory approvals on shareholding and also a reduction in the number of IPL games. Amid the delay, the BCCI and KCPL were in contact for many months, with the Indian cricket body also accepting various payments. But then suddenlu, the BCCI terminated the franchise, and also encashed a prior guarantee issued by RSW
Both KCPL and RSW initiated arbitration proceedings in 2012, and the tribunal ruled in their favour in 2015. It awarded ₹384 crore to KCPL for loss of profits and RS 153 crore to RSW for wrongful encashment of the bank guarantee, and also alongwith interest and legal costs.
The BCCI contested the tribunal’s decision, and stated that it exceeded its jurisdiction and misapplied legal principles. Also, according to the BCCI, KCPL’s failure to give the bank guarantee was a fundamental breach, justifying termination. It also contested the award of both loss of profist and wasted expenditure, citing that the damages were excessive and in breach of the contract. RSW’s arbitration claim was also challenged under the Indian Partnership Act.
The KCPL and RSW argued that BCCI had waived the guarantee deadline effectively, which made the termination unjustified.
The court found no grounds to interfere with the arbitral findings, and stated, “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 also added, “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.”
