FPJ Legal: Bombay HC sets aside arbitration order asking BCCI to pay over Rs 8,000 cr to Deccan Chargers
FPJ Legal: Bombay HC sets aside arbitration order asking BCCI to pay over Rs 8,000 cr to Deccan Chargers
PTI Photo

Mumbai: The Board of Control for Cricket in India (BCCI) got major relief after a single bench of the Bombay High Court bench of Justice Gautam Patel, on Wednesday, set aside an order passed by an arbitrator ordering the cricket body to pay over Rs 8,000 crore to Deccan Chronicle Holdings Ltd. (DCHL), the owner of Deccan Chargers (DC), a franchise of the Indian Premier League (IPL).

The award was passed while resolving a dispute that arose between the BCCI and the DC after the former terminated the franchise’s contract with the IPL. The BCCI had initially issued a show cause notice to the DCHL to terminate its 10-year-contract on various grounds like payment to players and other support staff etc. Since the DCHL didn’t respond to the show-cause notice within a month’s time, its contract was terminated.

The bench was hearing a plea filed by the BCCI challenging the award passed by the arbitrator Justice (retd.) C K Thakkar, in July 2020. Notably, the arbitrator had ordered the BCCI to even pay Rs 50 lakh as costs and had imposed interest at the rate of 10 per cent on the Rs 4,800 crore damages, to be counted from 2012, when the body had issued the termination notice to the DC. The amount that the BCCI would have had to pay, with interest, would have been Rs 8,640 crore.

The bench noted the submissions made by Solicitor General Tushar Mehta, appearing for the BCCI. He argued that the arbitrator had not assigned any reason for arriving at the amount awarded as damages for the DCHL. He argued that the arbitrator had not assigned reasons for most of his findings and thus in its entirety, the award was ‘patently illegal’.

Mehta further argued that the arbitrator had attempted to rewrite the entire contract between the BCCI and the DC. However, senior advocates Haresh Jagtiani, Navroz Seervai and Sharan Jagtiani for the DCHL countered that the award passed by the arbitrator had no room for the HC to interfere. The legal team argued that the arbitrator exercised discretion wherever necessary and even claimed mala fide on the part of the BCCI, which they said, was trying its best to oust the DC from IPL tournament.

Having heard the contentions, Justice Patel accepted the arguments by the BCCI saying, “At the broadest level, there were 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. The award proceeded in places without reasons, in others by ignoring evidence, in yet others by wandering far afield from the contract, and in taking views that were not even possible. In doing so, it brushed aside objections about insufficient pleadings. It granted reliefs not even prayed for, and took views that were not possible, i.e. that no reasonable person could have done,” Justice Patel held.

The bench, accordingly, noted that the BCCI only owed Rs 36 crore to the DCHL and ordered it to pay the amount, instead of the Rs 4,800 crore plus interest.

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