Setback to BCCI As Board Dealt With ₹538 Crore Blow After IPL Fallout Ruling

In what comes as a huge blow to the Board of Control for Cricket in India (BCCI), the Bombay High Court has upheld the ₹538 crores arbitral awards in favour of the owners of the now-defunct Kochi Tuskers Kerala, who featured in the IPL 2011. Single-judge Justice RI Chagla gave a verdict that the court cannot overrule the arbitrator's decision like an appellate body.

The issue arose after the BCCI terminated the contract of the Kochi Tuskers Kerala, awarded to a consortium led by Rendezvous Sports World (RSW) and later operated by Kochi Cricket Private Limited (KCPL), in 2011. The agreement required the franchise to furnish a bank guarantee by March that year, but KCPL failed to do so. The franchise cited unresolved issues such as stadium availability, shareholding approvals, and a sudden reduction in the number of IPL matches as the main reasons for their failure to furnish the guarantee.

The BCCI continued to engage with KCPL for several months and took payments before abruptly terminating the contract and encashing a previous guarantee by RSW. Both KCPL and RSW filed arbitral proceedings in 2012, claiming that the contract termination by the BCCI was unfair. They got the decision in their favour in 2015 when the arbitral tribunal ruled against the BCCI and awarded ₹384 crore to KCPL and the return of over ₹153 crore to RSW along with interest and costs.

The BCCI challenged the decision, saying that failing to furnish the bank guarantee was a clear breach of the contract. The BCCI also objected to the award of both loss of profits and wasted expenditure, saying that the damages were excessive and exceeded the contractual cap. It further said that the arbitration invoked by RSW was invalid under the Indian Partnership Act, however, KCPL and RSW said that BCCI had waived off the guarantee deadline, justifying that the termination was unjust.

“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.

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