BCCI loses ₹538 cr case as Bombay HC upholds Kochi Tuskers arbitration

Business Standard

12 hours ago

The Bombay High Court has upheld arbitral awards worth over ₹538 crore in favour of the now-defunct Indian Premier League (IPL) franchise, Kochi Tuskers Kerala. The ruling comes more than a decade after the Board of Control for Cricket in India (BCCI) terminated the franchise's contract, citing a breach of agreement, reported Bar and Bench.
Delivering the verdict on Tuesday, Justice RI Chagla rejected BCCI's plea challenging the arbitral awards, reaffirming the limited scope of judicial intervention under Section 34 of the Arbitration and Conciliation Act.
The single-judge bench ruled that the court cannot function as an appellate body over the arbitrator's conclusions.
'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,' the court said.
What is the dispute?
The Kochi Tuskers franchise, originally awarded to a consortium led by Rendezvous Sports World (RSW), was later operated by Kochi Cricket Private Limited (KCPL). The team took part in the 2011 IPL season but was terminated by BCCI in September 2011. The reason: failure to furnish a 10 per cent bank guarantee, allegedly due to internal conflicts among the franchise owners.
KCPL, however, maintained that the delay was caused by unresolved matters including stadium issues, regulatory approvals on shareholding, and a sudden reduction in the number of IPL matches.
Despite these problems, the BCCI continued to engage with the franchise and even accepted multiple payments, only to cancel the contract later and encash an earlier guarantee submitted by RSW.
Arbitration and award
In 2012, both KCPL and RSW initiated arbitration proceedings. The tribunal, in 2015, ruled in their favour. It awarded ₹384 crore to KCPL for loss of profits and ₹153 crore to RSW for wrongful encashment of the bank guarantee—together exceeding ₹538 crore, along with interest and legal costs.
BCCI had challenged the award, claiming the arbitrator exceeded his jurisdiction and misapplied legal principles.
It also argued that KCPL's failure to provide the guarantee was a fundamental breach and that the damages awarded were excessive and went beyond contractual limitations. Additionally, BCCI contested the maintainability of RSW's claim under the Indian Partnership Act.
What did the court say in its verdict?
KCPL and RSW countered BCCI's claims by stating that the board had, through its continued interactions, effectively waived the guarantee deadline. They insisted that the franchise's termination was both unjustified and disproportionate. They also defended the tribunal's findings, calling them a fair interpretation of the evidence on record.
Justice Chagla sided with the franchise. The court made it clear that the arbitrator's conclusion—that the BCCI's action amounted to a repudiatory breach of contract—did not warrant interference.
'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 held.
"Just because a different view may be possible would not be a ground for interference with the award," it added.
The judgment further clarified that the arbitrator rightly found that the BCCI had waived the requirement under Clause 8.4 of the Franchise Agreement regarding the bank guarantee for the 2012 season.
'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,' the court added.