Bombay High Court Upholds ₹538 Crore Arbitral Awards for Kochi Tuskers Kerala
Court Decision on IPL Franchise Dispute
The Bombay High Court has upheld arbitral awards totaling over ₹538 crore in favor of the owners of the now-defunct IPL team, Kochi Tuskers Kerala. Justice R.I. Chagla dismissed the objections raised by the BCCI, emphasizing that courts lack the authority to reassess evidence or interfere with the arbitrator's findings. The ruling highlighted that,
"The jurisdiction of this Court under Section 34 of the Arbitration Act is very limited. BCCI's attempt to examine the merits of the dispute contradicts the scope defined in Section 34. The BCCI's dissatisfaction with the findings regarding the evidence cannot serve as a basis to challenge the Award."
The court reiterated,
“The jurisdiction of this Court under Section 34 of the Arbitration Act is very limited. BCCI’s attempt to delve into the merits of the dispute contradicts the scope of the grounds contained in Section 34.”
The ruling confirmed that the arbitrator correctly determined that the BCCI's termination of the franchise constituted a "repudiatory breach of contract." Additionally, the court dismissed BCCI's claim that awarding both lost profits and wrongful encashment was beyond the contractual terms.
Regarding a missed guarantee deadline, the court noted that the arbitrator had thoroughly assessed all evidence and concluded that BCCI had implicitly waived the strict enforcement of that clause. The court stated:
“Just because a different view may be possible does not justify interference with the award."
The court concluded:
"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 furnishing of bank guarantee for the 2012 season on or before 22nd March, 2011 cannot be faulted."
Background of the Legal Dispute
The Kochi Tuskers Kerala franchise was awarded to a consortium led by Rendezvous Sports World in 2010 and was later managed by Kochi Cricket Private Limited (KCPL). The team participated in the IPL 2011 season but was terminated by the BCCI in September of that year due to the failure to provide a 10% bank guarantee.
KCPL contended that the delays were caused by unresolved ownership disputes, lack of clarity regarding the stadium, and a decrease in the number of IPL matches. They also claimed that the BCCI continued to engage and accept payments for several months before abruptly terminating the agreement and encashing a prior guarantee from RSW.
In 2012, KCPL and RSW initiated arbitration proceedings. By 2015, the tribunal awarded ₹384 crore to KCPL and ₹153 crore to RSW, including interest and legal fees. The BCCI contested the award, alleging overreach and flawed reasoning.
The High Court dismissed these claims, reaffirming the arbitrator's findings and the limited role of courts in reviewing arbitral decisions.