The Kochi Tuskers, which took part in the 2011 IPL season, were terminated by the BCCI the following year for allegedly violating the franchise agreement. In a setback for the Board of Control for Cricket in India (BCCI), the Bombay High Court upheld arbitral awards exceeding Rs. 538 crores in favor of the owners of the now-defunct Indian Premier League team, Kochi Tuskers Kerala [BCCI v. Kochi Cricket Private Limited and anr.]. Justice RI Chagla, serving as a single judge, dismissed BCCI’s challenge to the award, stating that the court cannot overturn the arbitrator’s findings.
“The court's jurisdiction under Section 34 of the Arbitration Act is quite limited. BCCI's attempt to examine the merits of the dispute contradicts the grounds outlined in Section 34 of the Act. The BCCI's dissatisfaction with the findings related to the evidence or the merits does not provide a valid reason to challenge the award,” the court stated.
It further noted that the arbitrator's determination that BCCI's termination of the Kochi franchise constituted a repudiatory breach of contract “does not warrant interference under Section 34 of the Arbitration Act, as it is based on a proper understanding of the evidence presented.”
The court concluded that the possibility of a different interpretation does not justify interfering with the award.
The conflict began when the BCCI terminated the Kochi Tuskers Kerala franchise, which was initially awarded to a consortium led by Rendezvous Sports World (RSW) and later managed by Kochi Cricket Private Limited (KCPL), in September 2011. According to the franchise agreement, KCPL was required to provide a bank guarantee by March of that year. However, KCPL did not meet this requirement, citing unresolved issues such as stadium availability, shareholding approvals, and a sudden decrease in the number of IPL matches. Despite ongoing discussions and accepted payments from KCPL over several months, the BCCI unexpectedly ended the franchise and cashed in a previous guarantee issued by RSW.
In 2012, both KCPL and RSW began arbitration proceedings, asserting that the termination was unjust. In 2015, the arbitral tribunal ruled in their favor, awarding KCPL over ₹384 crore and directing RSW to receive more than ₹153 crore, along with interest and costs.
The BCCI contested these awards, claiming that the tribunal had overstepped its authority and misinterpreted the law. It argued that KCPL's failure to provide the bank guarantee constituted a significant breach of the agreement, warranting termination. Additionally, the BCCI challenged the awards for both lost profits and wasted expenses, contending that the damages were excessive and surpassed the contractual limit.
The text also asserted that RSW's arbitration was invalid according to the Indian Partnership Act. In response, KCPL and RSW argued that BCCI had effectively waived the guarantee deadline through its actions and that the termination was neither justified nor proportionate. They contended that the arbitrator had correctly applied established legal principles to award damages for a lost business opportunity and prior investments. The court determined that the arbitrator's conclusions were well-founded and backed by evidence. It ruled that BCCI had waived the strict requirement to provide the guarantee by March 2011 through its conduct.
The court stated, "Based on the material facts and documents in the record, the arbitrator's conclusion that BCCI waived the requirement for a bank guarantee under Clause 8.4 of the KCPL-FA for the 2012 season, due by March 22, 2011, is valid."
Additionally, the court found no restrictions under the Partnership Act regarding RSW's claims and dismissed the argument that the arbitration process was improperly initiated.
As a result, the court determined that there was no evident illegality or error and permitted KCPL and RSW to withdraw the deposited amounts while granting BCCI six weeks to file an appeal.
Senior Advocates Rafiq A. Dada and T. N. Subramanian, along with advocates Aditya Mehta, Shivani Garg, Agneya Gopinath, and Dhruv Chhajed, represented the BCCI, instructed by the law firm Cyril Amarchand Mangaldas.
Senior Advocate Vikram Nankani, accompanied by advocates Sajal Yadav, Rohan Rajadhyaksh, Sumeet Nankani, Anukula Seth, Aayushya Geruja, and Vineetha Khandelwal, appeared for Kochi Cricket Private Limited, under the guidance of Gurdeep Singh Sachar.
Additionally, Senior Advocate Vikram Nankani, along with advocates Sumit Nankani and Rohan Rajadhyaksh, represented Rendezvous Sports World, instructed by Nipa S. Gupte.
