Bombay High Court upholds ₹538 cr award to defunct Kochi IPL franchise against BCCI
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).
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