Bombay High Court upheld the Rs.538 crore arbitration award in favour of Kochi Tuskers Kerala, rejecting BCCI’s challenge. The Court said, “It cannot act as an appellate body regarding the conclusions made by the arbitrator.”
The Bombay High Court confirmed arbitral awards worth more than Rs.538 crore in favour of the former owners of Kochi Tuskers Kerala, the Indian Premier League team that is no longer active.
Justice RI Chagla dismissed BCCI’s challenge to the arbitral awards, emphasizing the limited scope of judicial intervention permitted under Section 34 of the Arbitration and Conciliation Act.
The single-judge bench stated that the court cannot act as an appellate body regarding the conclusions made by the arbitrator.
Also Read: Champak vs BCCI: Delhi High Court Clash Over IPL’s Robotic Dog Name Sparks Legal Storm!
The court noted,
“The jurisdiction of this court under Section 34 of the Arbitration Act is very limited. BCCI’s endeavor 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,”
The Kochi Tuskers franchise, initially awarded to a consortium led by Rendezvous Sports World (RSW), was later managed by Kochi Cricket Private Limited (KCPL). The team participated in the 2011 IPL season but was terminated by the BCCI in September 2011 due to the failure to provide a 10 percent bank guarantee, allegedly stemming from internal conflicts among the franchise owners.
KCPL argued that delays were due to unresolved issues, including stadium concerns, regulatory approvals on shareholding, and a sudden decrease in the number of IPL matches.
Despite these challenges, the BCCI continued to interact with the franchise and accepted several payments before ultimately canceling the contract and encashing an earlier guarantee submitted by RSW.
In 2012, both KCPL and RSW initiated arbitration proceedings. In 2015, the tribunal ruled in their favor, awarding Rs.384 crore to KCPL for lost profits and Rs.153 crore to RSW for wrongful encashment of the bank guarantee totaling over Rs.538 crore, along with interest and legal costs.
BCCI challenged the award, claiming that the arbitrator exceeded his jurisdiction and misapplied legal principles.
BCCI also argued that KCPL’s failure to provide the guarantee constituted a fundamental breach and that the awarded damages were excessive and beyond contractual limits. Furthermore, BCCI contested the maintainability of RSW’s claim under the Indian Partnership Act.
KCPL and RSW countered BCCI’s arguments, asserting that the board’s ongoing interactions effectively waived the guarantee deadline. They maintained that the franchise’s termination was both unjustified and disproportionate, defending the tribunal’s findings as a fair interpretation of the evidence.
Justice Chagla ruled in favour of the franchise, stating that the arbitrator’s conclusion that BCCI’s actions constituted a repudiatory breach of contract did not warrant intervention.
The court stated,
“The arbitrator’s conclusion that the BCCI’s termination of the Kochi franchise was a repudiatory breach of contract would call for no interference under Section 34 of the Arbitration Act,”
The Court further added,
“Just because a different view may be possible would not be a ground for interference with the award,”
The judgment further clarified that the arbitrator correctly found that BCCI had waived the requirement under Clause 8.4 of the Franchise Agreement regarding the bank guarantee for the 2012 season.
The court concluded,
“Thus, based on these material facts and documents on record, the finding of the learned Arbitrator that BCCI waived the requirement under Clause 8.4 of the KCPL-FA for furnishing of bank guarantee for 2012 season on or before 22nd March, 2011 cannot be faulted,”
Case Title: BCCI v Kochi Cricket Private Limited and anr
Read Attachment