Bombay HC sets aside arbitration award that directed BCCI to pay over Rs. 4800 cr to Deccan Chargers

Bombay HC sets aside arbitration award that directed BCCI to pay over Rs. 4800 cr to Deccan Chargers

In a major relief to the Board of Control for Cricket in India (BCCI), the Bombay High Court on Wednesday set aside an arbitrator’s order that directed it to pay over Rs. 4800 crore to Deccan Chronicle Holding Ltd (DCHL) regarding dispute pertaining to termination of Indian Premier League (IPL) franchise team Deccan Chargers (DC).

A single-judge bench of Justice Gautam S Patel set aside the 2020 award passed by the sole arbitrator, who was appointed in 2012, to ascertain whether BCCI’s termination notice to Deccan Chargers was illegal.

While setting aside the arbitral award, the bench said that over Rs. 30 crore due and payable by the BCCI to DCHL are not yet paid may be given to the company by the Board with interest.

In July, last year, the HC appointed arbitrator passed an order in favour of the Deccan Chargers, one of the eight teams of IPL, also awarded over Rs. 4,800 crore to DCHL plus interest and held that the BCCI’s termination of the franchise was illegal.

The arbitrator granted damages of over Rs. 600 crore and compensation to DHCL of nearly Rs. 4150 crore. The award was subsequently challenged by the BCCI before the Bombay HC.

Solicitor General Tushar Mehta appearing for BCCI had submitted that the arbitration tribunal proceeded contrary to the contract while declaring termination to be bad on the ground the condition for the payment to players, support staff etc. had been “substantially complied with”.

He had added that the tribunal virtually entered into the area of re-writing the contract while holding that the BCCI should have paid the players and other support staff.

Mehta submitted that the Tribunal committed a serious error in awarding Rs. 4150 crore without
assigning any reasons at all for arriving at this figure and added that there was no method of computation to arrive at this figure that is even remotely mentioned.

The dispute arose in 2012 after the DCHL was declared a successful bidder for franchise Deccan Chargers from Hyderabad and an agreement was made between DC and BCCI for ten years. However, in August 2012, the BCCI issued a show-cause notice for the termination of DC to DCHL. The termination was confirmed a day before the expiry of the 30-day period granted to respond to the notice.

Aggrieved DCHL then approached the HC against the termination and the court in September 2012 appointed retired Supreme Court judge Justice (Retd) C K Thakker as the sole arbitrator to decide the dispute who passed the award in favour of DHCL July, last year.

The detailed HC order on BCCI’s appeal will be made available in due course.