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Kochi Tuskers vs BCCI: The IPL dispute that ended in ₹538 crore court blow
Almost 14 years after it brought the Indian Premier League (IPL) to Kerala — only to be terminated a season later — the ghost of Kochi Tuskers Kerala has returned to haunt the Board of Control for Cricket in India (BCCI), now with a legal price tag of ₹538 crore.
In a significant setback for the BCCI, the Bombay High Court has upheld arbitral awards totalling ₹537.5 crore in favour of the defunct franchise's parent company, Kochi Cricket Private Ltd (KCPL), and its principal stakeholder, Rendezvous Sports World (RSW).
Justice RI Chagla, delivering the verdict, dismissed the BCCI's petition under Section 34 of the Arbitration and Conciliation Act, 1996, reinforcing that courts cannot reappreciate evidence or sit in appeal over arbitral findings. 'BCCI's dissatisfaction as to the findings rendered... cannot be a ground to assail the award,' the court said.
A team, a tax, a termination
The Kochi franchise—one of two teams added during the BCCI's 2010 expansion — was born in controversy and proved to be short-lived. Even before it debuted in the 2011 IPL season, the consortium behind it was fighting battles on multiple fronts: infighting among shareholders, a PR disaster over its proposed name ('Indi Commandos'), and threats of relocation after disputes over Kerala's entertainment tax.
Despite a middling on-field performance—six wins in 14 matches—the bigger implosion came off the field. KCPL failed to furnish a mandatory 10 per cent bank guarantee for the 2012 season, citing unresolved shareholding issues and regulatory delays. Still, BCCI continued accepting payments from the franchise well into mid-2011, creating what the court has now interpreted as an implicit waiver of strict compliance.
By September 2011, the BCCI had had enough. It terminated the franchise for breach of agreement, citing non-submission of the guarantee. Players were redistributed via auction; unsold ones were paid out of an earlier bank guarantee, which the BCCI unilaterally encashed.
Arbitral award, and its confirmation
In 2012, KCPL and RSW moved to arbitration, claiming wrongful termination. By 2015, the arbitral tribunal ruled in their favour: ₹384 crore to KCPL for lost future profits and ₹153 crore to RSW for unjustified encashment of the bank guarantee.
The BCCI challenged the award, arguing that the arbitrator exceeded his mandate and erred in awarding both profits lost and wasted expenditure—claims it said were duplicative and contrary to contract law. The Board also invoked provisions of the Indian Partnership Act to question the maintainability of RSW's claim.
The High Court disagreed on every count. Justice Chagla found the arbitrator's reasoning 'based on a correct appreciation of the evidence,' and reiterated that the court's role under Section 34 is not to second-guess findings of fact or contractual interpretation, absent a glaring legal error.
He further observed that the BCCI, by continuing to engage with the franchise and accept payments post-deadline, had effectively 'waived' strict enforcement of the bank guarantee clause.
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