Upholding the scope of arbitration proceedings, the Supreme Court on Friday allowed the World Sport Group (WSG) to proceed with the arbitration proceeding against MSM Satellite, earlier known as Sony Entertainment Television, over a dispute on the payment of a facilitation fee by MSM to WSG for acquiring the broadcast rights for the Indian Premier League (IPL).
“This arbitration agreement is wide enough to bring this dispute within the scope of arbitration … it is for the arbitrator to decide this dispute in accordance with the arbitration agreement,” held a bench of Justices AK Patnaik and Fakkir Mohamed Ibrahim Kalifulla as it set aside the Bombay High Court order.
A division bench of the High Court had restrained WSG (Mauritius) from proceeding with the arbitration. While allowing the appeal of MSM, the bench had in September 2010, set aside the order of its single-member bench.
It had also stayed the directions of its single-member bench, asking the MSM to deposit the disputed Rs 300 crore within three weeks. WSG had moved the apex court against this order.
The controversy over the Rs 425 crore facilitation fee had erupted after the BCCI ousted IPL Commissioner Lalit Modi, alleging financial irregularities in the media-rights deal signed by him, among other things. The BCCI had raised objections and claimed that any such fee should have been paid to it.
While WSG wanted the dispute to be resolved through arbitration in Singapore, as agreed in the contract between the parties, MSM insisted that it should be decided in a regular trial before the court.
Deciding the appeal in favour of the WSG, the apex court upheld the single-bench order of the High Court. “It has been rightly held by the learned single judge of the Bombay High Court that it is for the arbitrator to decide this dispute in accordance with the arbitration agreement,” it said.
According to a deal inked in 2009, MSM Satellite was to pay Rs 425 crore to WSG to acquire the global rights to broadcast the IPL 20-20 cricket tournament.
However, the Board of Cricket Control in India (BCCI) later wrote to MSM Satellite on May 30, 2010, stating that WSG had no role to play in execution of the contract and hence, the “facilitation fee” of Rs 425 crore was to be paid to the BCCI.