Setback for BCCI in Kochi Tuskers case: Bombay HC upholds Rs 538 crore arbitration awards to defunct IPL franchise

Upholding the awards, a single-judge bench of Justice Riyaz I Chagla dismissed the two petitions by the BCCI. The petition against KCPL concerned an award related to disputes arising from its franchise agreement with the BCCI, dated March 12, 2011. The challenge to the award in favour of RSW was related to disputes arising from its agreement with the BCCI, dated April 11, 2010.

The bench noted that the BCCI, alleging that the awards were perverse, sought the court to venture into fact-finding exercise by revisiting the record and accepting competing interpretations of various clauses of the agreements between the parties.

“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,” Justice Chagla noted.

“The conclusion of the learned Arbitrator namely that BCCI had wrongfully invoked the bank guarantee which amounted to a repudiatory breach of the KCPL-FA would call for no interference under Section 34 of the Arbitration Act considering that this is based on a correct appreciation of the evidence on record,” Justice Chagla added.

As per the franchise agreement, KCPL was required to furnish a bank guarantee by March 2011, which the firm failed to do. KCPL referred to the non-availability of a brand-new stadium in Kochi, shareholding approvals, and a sudden reduction in the number of IPL matches.

The BCCI, through senior advocate Rafique Dada, argued that the tribunal’s “finding that the non-availability of a brand-new stadium at Kochi was a breach on the part of BCCI is ex-facie materially contrary to the terms of governing contracts/documents”.

The cricket board also claimed that the tribunal acted “beyond the terms of contract” and KCPL’s failure to provide bank guarantee was a fundamental breach of the franchise agreement. The BCCI alleged that the damages awarded for loss of profits and wasted expenditure were in excess of the agreement.

However, senior advocate Vikram Nankani, representing the respondents KCPL and RSW, opposed the BCCI’s plea, claiming that the termination was unjustified and disproportionate.

Justice Chagla, after perusing submissions, held that the arbitrator’s conclusion was supported by records.

“Thus, 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 noted.

The high court said there were “no valid grounds” raised in the two pleas “to warrant an interference with the KCPL Award and the RSW Award” and there was ” no patent illegality in the impugned awards”.