In a landmark ruling or concerning dispute, the Bombay High Court held recently in a long-standing cricket dispute between the Board of Control for Cricket in India (BCCI) and Kochi Tuskers Kerala, a former Indian Premier League (IPL) franchise team. The court held that the BCCI is required to pay around ₹538 crore to the owners of Kochi Tuskers, and finally carry out the decision of an arbitration tribunal.
Background of the Case
Kochi Tuskers Kerala was included as one of the new franchises for the IPL in 2010; unfortunately, just 1 year later, the BCCI ended (voided) the contract with Kochi Tuskers. The reason given for terminating the contract with Kochi Tuskers was that Kochi Tuskers failed to produce the required bank guarantee in time. A bank guarantee is a promise from a bank that it will pay money if the team fails to meet its obligations. Kochi Tuskers argued that there were many problems, such as issues with the stadium, delays in getting approvals for their ownership, and the BCCI reducing the number of matches in the IPL season.
After the termination, Kochi Tuskers and their owners, mainly Kochi Cricket Private Limited (KCPL) and Rendezvous Sports World (RSW), started legal action. They went to an arbitration tribunal (a private legal process to settle disputes outside court). In 2015, the tribunal ruled in favour of Kochi Tuskers, saying that the BCCI did not have a valid reason to end the contract so suddenly and must pay compensation.
What the Arbitration Tribunal Said
The arbitration tribunal directed that the BCCI should pay ₹385.50 crore to KCPL and ₹153.34 crore to RSW, with interest at the rate of 18% per annum. The total amount claimed, with interest thereon, is approximately ₹538 crore.
BCCI’s Challenge in the High Court
The BCCI did not agree with the arbitration decision and went to the Bombay High Court, asking it to cancel the award. The BCCI argued that the arbitrator made mistakes in law, did not follow the correct legal procedures, and that the evidence did not support the decision. The BCCI also said that the notice to start arbitration was not proper and so the whole process should be cancelled.
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High Court’s Decision
A single judge of the Bombay High Court, Justice Riyaz Chagla, listened to both sides. The court said that under the Arbitration Act, its power to interfere with an arbitration award is very limited. The court cannot simply change the decision because it disagrees with the arbitrator’s view or thinks the evidence was not strong enough. The court only looks for serious legal mistakes or unfairness.
The court found no such problems here. It agreed with the arbitrator that the BCCI’s termination of the contract was unjustified, and squatters had the right to seek compensation. The court stated that the BCCI’s arguments in seeking to have the award set aside were insufficient and it reaffirmed the arbitration award.
What Happens Next?
The BCCI now has to pay ₹538 crore to Kochi Tuskers owners. The court gave the BCCI six weeks to consider if it wants to appeal to a higher court. During this time, the money that has already been deposited cannot be taken by Kochi Tuskers. If the BCCI does not appeal or loses the appeal, Kochi Tuskers can finally get their money.
Summary
The Bombay High Court has said that the BCCI was wrong to end the contract with Kochi Tuskers Kerala and must pay them about ₹538 crore as compensation. The court did not find any serious legal mistakes in the arbitration process, so the earlier decision stands. This is a big setback for the BCCI, which now has to pay a huge amount unless it wins an appeal in a higher court.
Written By Smita Singh
