IPL: Bombay HC sets aside award directing BCCI to pay DCHL

In July 2020, an arbitration award directed BCCI to pay DCHL a compensation of Rs 4,814.67 crores and 10 per cent interest from 2012. This was subsequently challenged before the high court.

A single bench set aside the award (order) passed by an arbitrator who was appointed in 2012 to decide on the Board’s termination notice to Deccan Chronicle Holdings Limited (DCHL).    -  AP

In a relief to the Board of Control for Cricket in India (BCCI), the Bombay High Court on Wednesday set aside an arbitration award directing the Board to pay Rs 4800 crores for the termination of Hyderabad Deccan Charges from the Indian Premier League (IPL).

A single bench of justice Gautam Patel was hearing a commercial arbitration petition filed by the BCCI challenging an award (order) passed by a sole arbitrator on July 17, 2020, calling the termination of Franchise agreement as "illegal, unlawful and contrary to law".

Retired Supreme Court judge CK Thakkar had directed the Board to pay Rs 4814,17 crore along with interest on this amount at 10% per annum from the date of the arbitration proceedings and Rs 50 lakhs in cost to DCHL.

READ: BCCI asked to pay Rs 4814.67 crore to Deccan Chargers for wrongful termination

DCHL's franchise agreement with the BCCI is dated April 10, 2008. DCHL had to make 50% payment to its players by 1st May 2012. However, it did not meet this obligation. Till June 7, 2012, no payment was done, and it was overdue by five weeks. This was non-compliance with the teams of players' contracts. BCCI then partnered with the International Management Group, an events company and had requested the company to seek a formal confirmation from DCHL that all outstanding player payments would be made by July 31, 2012. In default of confirmation or payment in full by that date, DCHL would be ‘in breach of fundamental terms of the Franchise Agreement’, with serious consequences.

DCHL sought time till August 10, 2012, to pay its players. It, however, did not pay nor seek any further extension. In mid-August, DCHL authorised BCCI to identify a suitable buyer at a price BCCI determined to be the best bid, and DCHL unconditionally undertook to accept such a bid. It also authorised the BCCI to implement this sale by public tender or private treaty, at its discretion.

Soon thereafter there were more than half a dozen banks or financial institutions in the fray: ICICI, YBL, Kotak, IDFC, Canara Bank, Axis Bank, SREI Infrastructure and Religare; and one financial institution, IFCI, had initiated recovery proceedings. But now, RBL too claimed to be a secured lender to DCHL for Rs 55 crores as a short-term loan.

On September 14, 2012, BCCI received three separate letters by or on behalf of DCHL stating, YBL has offered to provide funds to clear all dues; Kotak, Religare and IDFC had agreed to have their claimed charges vacated or cancelled and in the last letter DCHL’s attorneys denied that it had ever committed any breaches at all, invoked arbitration, and called on BCCI not to terminate.

On the same day, IPL's governing council decided to terminate the Franchise Agreement with immediate effect. In the 176-page judgment, the court noted, "There have been three defaults — not paying players and others, creating charges on assets, and the insolvency event (the IFCI winding-up petition). The contract said the first two were curable; if uncured, they invited termination. The third could trigger immediate termination (leaving aside the fact that BCCI gave time to DCHL to have this resolved as well). Not one of the three is convincingly shown to have been cured or not to exist. All three continued" and held, "I have concluded that the Award cannot be sustained."

For more updates, follow Sportstar on :