Bombay HC rules in favour of Kochi Tuskers, upholds Rs 538 crore arbitral award against BCCI
The Bombay High Court on Tuesday upheld arbitral awards totalling over Rs 538 crore in favour of the now-defunct Indian Premier League (IPL) franchise Kochi Tuskers, dismissing BCCI's challenge.
Justice RI Chagla ruled that the court's jurisdiction under Section 34 of the Arbitration Act is limited and it cannot function as an appellate authority over the arbitrator's findings.
The dispute originated when BCCI terminated the Kochi Tuskers franchise in September 2011, citing their failure to provide a 10% bank guarantee amid internal ownership disputes. The franchise had participated in IPL 2011 under a consortium led by Rendezvous Sports World (RSW) and operated by Kochi Cricket Private Limited (KCPL).
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KCPL had attributed the delay in furnishing the bank guarantee to unresolved issues including stadium availability, regulatory approvals on shareholding, and a reduction in IPL matches. Despite these delays, BCCI continued to engage with KCPL and accepted payments before terminating the franchise.
"The jurisdiction of this Court under Section 34 of the Arbitration Act is very limited.
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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."
In 2012, both KCPL and RSW initiated arbitration proceedings, resulting in a 2015 tribunal ruling in their favour. The tribunal awarded Rs 384 crore to KCPL for loss of profits and Rs 153 crore to RSW for wrongful encashment of the bank guarantee, along with interest and legal costs.
BCCI contested these awards, claiming the tribunal exceeded its jurisdiction and misapplied legal principles. They argued that KCPL's failure to provide the bank guarantee constituted a fundamental breach justifying termination.
KCPL and RSW countered that BCCI had effectively waived the guarantee deadline through its conduct and that the termination was unjustified and disproportionate. They maintained the arbitrator's ruling was based on accurate evidence assessment.
"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 found no grounds to interfere with the arbitral findings, emphasising that the possibility of a different view would not warrant interference with the award.
"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."
BCCI have six weeks to challenge the judgement.
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