High Court Sets Aside Arbitration Order Requiring BCCI to Pay US$642 Million to Deccan Chargers

High Court Sets Aside Arbitration Order Requiring BCCI to Pay US$642 Million to Deccan Chargers
22.06.2021,12:06 35 0

On 16 June 2021, the Bombay High Court ruled in favour of the BCCI, setting aside an arbitration order requiring Indian cricket’s governing body to pay damages in excess of Rs 4800 crore (US$ 642 million) in a case relating to the alleged wrongful termination of an IPL franchise known as Deccan Chargers.

Dispute Over Termination of IPL Franchise Deccan Chargers

In July 2020, the Board of Control for Cricket in India (BCCI) was directed by an arbitrator’s order to compensate Deccan Chronicle Holding Ltd (DCHL) with a payment of over Rs 4800 crore following a dispute over the termination of the IPL franchise Deccan Chargers. That order has been set aside by the Bombay High Court bench headed by Justice G S Patel.

Arbitration Order Challenged by BCCI

The order had been challenged by the BCCI. After the IPL tournament was conceptualised by the BCCI in 2008, the Hyderabad-based DCHL successfully bid for a franchise called Deccan Chargers. The BCCI signed up the franchise to play in the IPL for 10 years. Among the eight original teams that played in the inaugural season of the IPL, Deccan Chargers led by Adam Gilchrist won the title in 2009, in only the 2nd season of the T20 league competition.

DCHL Was Served Notice by BCCI Before Termination

However, in September 2012, Deccan Chargers had their franchise terminated by the BCCI, alleging that the BCCI code had been breached by the franchise. In a bid to sell the franchise, DCHL had received a single bid, from PVP Ventures, a bid that was rejected. The contract was later terminated by the BCCI and all the players of the erstwhile franchise were inducted into the BCCI’s auction pool. Before the BCCI terminated the 10-year contract with Deccan Chargers, it had sent DCHL, the franchise owners, a show-cause notice on grounds relating to various issues such as remunerations of support staff and players. DCHL, which was required to reply to the notice, failed to do so within the prescribed deadline of one month, prompting the cricket body to terminate the contract.

Court Intervention Sought by DCHL

The Bombay High Court had then been approached by DCHL which claimed that the BCCI had terminated the franchise arbitrarily. In September 2012, Supreme Court Justice C K Thakker was appointed by the Bombay High Court as the sole arbitrator in the case. In 2020, an INR 4800 crore verdict was awarded by Thakker in favour of Deccan Chargers.

Justice Patel Rules Against Arbitrator

Last week, the Bombay High Court bench headed by Justice Patel held that the arbitrator had ignored evidence and granted reliefs that had not been pleaded for by DCHL. Accordingly, the bench directed the BCCI to pay Rs 36 crore to the DCHL instead of Rs 4,800 crore plus interest as ordered by the arbitrator. A similar arbitration proceeding against the BCCI was initiated by the owners of the franchise Kochi Tuskers Kerala. The BCCI which lost the case was ordered by the arbitrator to pay INR 850 crore. The BCCI later challenged the order, and the case is yet to be decided.

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