BCCI receives huge setback from Bombay HC; asked to pay huge amount to Kochi Tuskers Kerala

The Bombay High Court upheld arbitral verdicts over ₹538 crore in favor of the defunct Indian Premier League (IPL) team Kochi Tuskers Kerala on Tuesday, dealing a serious blow to the Board of Control for Cricket in India (BCCI). The court could not serve as an appellate authority over the arbitrator's conclusions, according to Justice R.I. Chagla, who rejected BCCI's motion against the arbitration's verdict.

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In September 2011, the BCCI canceled the Kochi Tuskers Kerala franchise, which had been awarded to a consortium headed by Rendezvous Sports World (RSW) and subsequently run by Kochi Cricket Private Limited (KCPL). The board pointed to internal conflicts within the ownership group as the reason for not providing the required 10% bank guarantee.

Arbitration was started in 2012 between KCPL and RSW, and it was decided in their favor in 2015. In addition to interest and legal fees, the tribunal granted ₹384 crore to KCPL for lost earnings and ₹153 crore to RSW for improperly cashing out the guarantee.

BCCI's termination of the Kochi franchise was a repudiatory breach of contract; Bombay High Court

BCCI contested the awards, claiming that the panel had abused its authority and implemented the law incorrectly.  It argued that termination was warranted because KCPL's refusal to give the assurance constituted a fundamental violation.  Additionally, the board asserted that the damages granted were out of proportion and went against the terms of the contract.  It further questioned whether RSW's claim under the Indian Partnership Act was legitimate.

In response, KCPL and RSW argued that the termination was unfair and out of proportion because BCCI had essentially waived the guarantee deadline through its actions.  They stressed that a fair evaluation of the facts served as the foundation for the tribunal's decision.

"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 Bombay High Courts stated in its judgment.

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This decision by the Bombay High Court clearly supports the arbitral process in business disputes by upholding the arbitral decisions' finality and limiting judicial review under the Arbitration and Conciliation Act.

"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 furnishment of bank guarantee for 2012 season on or before 22nd March, 2011 cannot be faulted," the Court said.

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