Major Setback for BCCI: Bombay HC Upholds Rs 538-Cr Award to Kochi IPL Team

While upholding arbitral awards exceeding INR 538 crore in favour of the now-discontinued Indian Premier League (IPL) team Kochi Tuskers Kerala, the Bombay High Court on Tuesday dismissed a plea filed by the Board of Control for Cricket in India (BCCI) challenging the awards.

In a 107-page judgment, a bench presided over by Justice RI Chagla held that the findings of the arbitral tribunal were based on evidence and did not suffer from any patent illegality.

The single-judge bench noted, "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 the 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 High Court was hearing two arbitration petitions filed by the BCCI, challenging the arbitral awards in favour of Kochi Cricket Private Limited (KCPL) and Rendezvous Sports World (RSW).

The case traces back to the IPL franchise Kochi Tuskers Kerala, which played in the 2011 season. The franchise was initially awarded to a consortium led by Rendezvous Sports World (RSW), which entered into an agreement with the BCCI in 2010. Thereafter, Kochi Cricket Private Limited (KCPL) was formed to take over the franchise’s operations, and a separate agreement was signed with the BCCI in 2011.

The dispute arose after the Kochi Tuskers Kerala franchise was terminated by the BCCI on September 19, 2011. The termination had taken place as KCPL had failed to furnish the required bank guarantee by the stipulated deadline as per the franchise agreement.

Pursuant to which, arbitral proceedings had been initiated by both KCPL and RSW, which eventually resulted in arbitral awards in their favour. It awarded INR 384 crore to KCPL and INR 153 crore to RSW.

The said arbitral awards had been challenged by BCCI before the Bombay High Court under Section 34 of the Arbitration and Conciliation Act, 1996.

Before the High Court, the BCCI contended that it was fully justified in terminating the agreement, arguing that Kochi Cricket Pvt Ltd had failed to furnish the mandatory bank guarantee by the due date.

It further argued that the arbitral tribunal had exceeded its jurisdiction and misapplied legal principles. The BCCI also contested the award of dual damages, claiming that such a grant was impermissible.

On the other hand, KCPL and RSW argued that the termination was wrongful and unjustified, particularly since they had been in active dialogue with BCCI. KCPL maintained that it was always ready and willing to perform its obligations, and that BCCI’s conduct undermined the franchise’s operations. They further contended that the damages awarded were justified.

The High Court dismissed both petitions filed by BCCI, holding that the findings were based on material evidence and that no patent illegality or perversity was found in the awards.

"I am of the considered view that there are no valid grounds raised in KCPL’s Petition and RSW’s Petition under Section 34 of the Arbitration Act to warrant an interference with the KCPL Award and the RSW Award, which have been impugned therein. There is no patent illegality in the impugned awards which requires an interference by this Court. In view thereof, the Arbitration Petition No. 1752 of 2015 and Arbitration Petition No. 1753 of 2015 are devoid of merit and are accordingly dismissed," the court held

Accordingly, the court directed that KCPL and RSW are entitled to withdraw the awarded amounts deposited by BCCI in court after a waiting period of two weeks.

Case Title: BCCI v Kochi Cricket Private Limited and Anr