Latest news with #IndianPartnershipAct
Mint
10 hours ago
- Business
- Mint
Bombay High Court upholds ₹538 cr award to defunct Kochi IPL franchise against BCCI
In a major blow to the Board of Control for Cricket in India (BCCI), the Bombay High Court has upheld an arbitral award of over ₹ 538 crore in favour of the now-defunct Indian Premier League (IPL) franchise Kochi Tuskers Kerala. 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.
Mint
14 hours ago
- Business
- Mint
Bombay High Court upholds ₹538 cr award to defunct Kochi IPL franchise against BCCI
In a major blow to the Board of Control for Cricket in India (BCCI), the Bombay High Court has upheld an arbitral award of over ₹ 538 crore in favour of the now-defunct Indian Premier League (IPL) franchise Kochi Tuskers Kerala. 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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Business Standard
14 hours ago
- Business
- Business Standard
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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Business Standard
16 hours ago
- Business
- Business Standard
BCCI loses ₹538 cr case as Bombay HC upholds Kochi Tuskers arbitration
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.
