Setback for BCCI as court affirms Rs 538-crore arbitral awards to Kochi Tuskers

India Today

3 hours ago

In a significant setback for the Board of Control for Cricket in India (BCCI), the Bombay High Court on Tuesday affirmed arbitral awards exceeding Rs 538 crore in favour of the owners of the now-defunct Indian Premier League (IPL) franchise Kochi Tuskers Kerala [BCCI v Kochi Cricket Private Limited and others].Justice R.I. Chagla, presiding as a single judge, dismissed the BCCI's challenge to the arbitral awards, ruling that the court could not act as an appellate authority over the arbitrator's findings.advertisement"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 observed.
The Kochi Tuskers franchise, awarded to a consortium led by Rendezvous Sports World (RSW) and later operated by Kochi Cricket Private Limited (KCPL), participated in the 2011 IPL season. However, the BCCI terminated the franchise in September 2011, citing a breach of the franchise agreement—specifically, the failure to furnish a 10% bank guarantee amid internal disputes between the owners.KCPL had contended that the delay was due to unresolved issues including stadium availability, regulatory approvals on shareholding, and a sudden reduction in the number of IPL matches. Despite the delay, BCCI continued engaging with KCPL for several months and accepted various payments, before abruptly terminating the franchise and encashing a prior guarantee issued by RSW.advertisementArbitration proceedings were initiated by both KCPL and RSW in 2012, with the tribunal ruling 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, along with interest and legal costs.BCCI contested the awards, arguing that the tribunal had exceeded its jurisdiction and misapplied legal principles. It insisted that KCPL's failure to provide the bank guarantee amounted to a fundamental breach, justifying the termination. It also objected to the award of both loss of profits and wasted expenditure, claiming the damages were excessive and in breach of the contractual limits.Further, BCCI challenged the validity of RSW's arbitration claim under the Indian Partnership Act.In response, KCPL and RSW argued that BCCI had, through its conduct, effectively waived the guarantee deadline and that the termination was unjustified and disproportionate. They maintained that the arbitrator's ruling was based on "a correct appreciation of the evidence on record".The Court concurred, finding no grounds to interfere with the arbitral findings. "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. It emphasised that "just because a different view may be possible would not be a ground for interference with the award."advertisementWith this ruling, the Bombay High Court has reinforced the finality of arbitral awards and limited judicial scrutiny under the Arbitration and Conciliation Act, marking a clear judicial endorsement of the arbitral process in commercial disputes."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 said.Must Watch