Bombay High Court rules in favour of Kochi Tuskers, upholds ₹538 crore arbitral award against BCCI

In a setback to the Board of Control for Cricket in India (BCCI), the Bombay High Court on Tuesday upheld arbitral awards of over ₹538 crores in favour of the owners of the now defunct Indian Premier League team, Kochi Tuskers Kerala [BCCI v Kochi Cricket Private Limited and anr]. .Single-judge Justice RI Chagla rejected BCCI’s challenge to the award and said that the Court cannot sit in appeal over the arbitrator’s findings.Kochi Tuskers, which participated in the 2011 season of IPL, was terminated by the BCCI the following year due to an alleged breach of the franchise agreement.“The jurisdiction of this Court under Section 34 of the Arbitration Act is very limited. BCCI’s endeavour 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 Court observed. It added that 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 considering that this is based on a correct appreciation of the evidence on record.” The Court held that just because a different view may be possible would not be a ground for interference with the award. .The dispute arose after the Kochi Tuskers Kerala franchise, awarded to a consortium led by Rendezvous Sports World (RSW) and later operated by Kochi Cricket Private Limited (KCPL), was terminated by BCCI in September 2011. The franchise agreement had required KCPL to furnish a bank guarantee by March that year. KCPL failed to do so, citing unresolved issues such as stadium availability, shareholding approvals and a sudden reduction in the number of IPL matches.Although BCCI continued to engage with KCPL for several months and accepted payments, it abruptly terminated the franchise and encashed a prior guarantee issued by RSW. Both KCPL and RSW initiated arbitration proceedings in 2012, claiming the termination was wrongful. In 2015, the arbitral tribunal ruled in their favour, awarding over ₹384 crore to KCPL and ordering the return of over ₹153 crore to RSW along with interest and costs..BCCI challenged the awards, arguing that the tribunal had acted beyond its powers and misapplied the law. It maintained that KCPL’s failure to submit the bank guarantee was a fundamental breach of the agreement, justifying termination. The BCCI also objected to the award of both loss of profits and wasted expenditure, arguing that the damages were excessive and exceeded the contractual cap.It further claimed that the arbitration invoked by RSW was invalid under the Indian Partnership Act. KCPL and RSW countered that BCCI had waived the guarantee deadline through its conduct, and that the termination was neither justified nor proportionate. .They argued the arbitrator had applied settled legal principles to award damages for a lost business opportunity and investment already made.The Court held that the arbitrator’s findings were well-reasoned and supported by records. It ruled that BCCI had, by its conduct, waived the strict requirement for furnishing the guarantee by March 2011. “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.It also found no bar under the Partnership Act to RSW’s claims and rejected the argument that the arbitration was improperly invoked. Hence, it concluded that no patent illegality or error had been shown and allowed KCPL and RSW to withdraw the deposited sums and granted BCCI six weeks to file an appeal..Senior Advocates Rafiq A Dada and TN Subramanian along with advocates Aditya Mehta, Shivani Garg, Agneya Gopinath and Dhruv Chhajed instructed by law firm Cyril Amarchand Mangaldas appeared for BCCI..Senior Advocate Vikram Nankani along with advocates Sajal Yadav, Rohan Rajadhyaksh, Sumeet Nankani, Anukula Seth, Aayushya Geruja and Vineetha Khandelwal instructed by Gurdeep Singh Sachar appeared for Kochi Cricket Private Limited.Senior Advocate Vikram Nankani along with advocates Sumit Nankani and Rohan Rajadhyaksh instructed by Nipa S Gupte appeared for Rendezvour Sports World..[Read Judgment]