Sanchayita Lahkar

The High Court of Bombay Single Bench of Justice R. I. Chagla delivered a judgment dismissing Arbitration Petition No. 1752 of 2015 and Arbitration Petition No. 1753 of 2015. The Court confirmed the arbitral awards in disputes emanating from Franchise Agreements with two entities. The judgment permitted the successful claimants to withdraw the amounts deposited by the opposite party after six weeks from the date of uploading the judgment and order. The Court affirmed the findings of the arbitral tribunal, specifically in regard to the validity of the arbitration proceedings and the awards concerning damages. The petitions challenging the arbitral awards dated 22nd June 2015 were dismissed.

The case arose from two arbitration petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996, challenging arbitral awards rendered on 22nd June 2015. Arbitration Petition No. 1752 of 2015 was filed against Kochi Cricket Private Limited (KCPL), and Arbitration Petition No. 1753 of 2015 was filed against M/s. Rendezvous Sports World (RSW) and others. The disputes stemmed from separate Franchise Agreements dated 12th March 2011 (KCPL) and 11th April 2010 (RSW). Due to commonality of facts and mutual consent, the disputes were adjudicated by the same arbitral tribunal.

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The origins of the case trace back to 2008, when an Invitation to Tender (ITT) was issued for the Indian Premier League (IPL) franchises. On 9th March 2010, a new ITT was issued for two additional franchises, leading to RSW becoming the successful bidder for a Kochi-based IPL franchise. RSW executed an Unincorporated Integrated Joint Venture Agreement on 17th March 2010 and furnished a bank guarantee of Rs. 153.34 crores on 27th March 2010.

An interim Franchise Agreement was executed between RSW and the opposite party on 11th April 2010. Pending incorporation of KCPL, the RSW Agreement governed the parties' relationship. On 5th September 2010, the opposite party issued a revised IPL format, reducing the number of matches for 2011. KCPL began operations on 27th November 2010. Through multiple correspondences in January and February 2011, KCPL sought a reduction in franchise fees, which the opposite party rejected.

On 7th February 2011, KCPL requested permission to use Jawaharlal Nehru Stadium temporarily. This was approved on 3rd March 2011. Despite unresolved concerns, the KCPL Franchise Agreement was signed on 12th March 2011. KCPL was obligated to deliver a bank guarantee by 22nd March 2011. RSW was to furnish a fresh bank guarantee by 27th March 2011. Assurances were made that the guarantees were forthcoming.

The opposite party issued reminders, and KCPL acknowledged the requirement by letter dated 2nd May 2011. On 1st July 2011, KCPL cited delay and requested share transfer permission to facilitate the guarantee. KCPL reiterated its intent to submit the guarantee by 21st September 2011. However, the opposite party demanded the guarantee on 17th September 2011 and subsequently terminated both agreements on 19th September 2011. The bank guarantee furnished by RSW was encashed.

KCPL initiated arbitration on 18th January 2012, alleging wrongful termination. RSW initiated arbitration on 4th August 2012. The opposite party challenged the arbitrator’s jurisdiction under Section 16 of the Arbitration Act. This challenge was rejected on 17th July 2015.

The arbitral tribunal dismissed the counterclaim in KCPL’s arbitration and awarded Rs. 3,84,83,71,842/- with 18% interest from 19th September 2011, Rs. 72,00,000/- as arbitration costs, and further 18% interest until payment. In RSW’s arbitration, the tribunal directed return of Rs. 1,53,34,00,000/- with 18% interest from termination until the award.

The opposite party filed petitions on 16th September 2015 challenging the awards. An unconditional stay on the KCPL Award was granted on 13th April 2018. The Supreme Court modified this order on 11th May 2018, directing a deposit of Rs. 100 crores. In the RSW matter, a conditional stay was granted subject to deposit of 50% of the awarded sum with interest. The required deposit was made on 10th July 2018.

In the petitions, it was contended that the awards were contrary to substantive Indian law, perverse, unsupported by evidence, and de hors the contractual terms. Specific objections included the arbitrator’s findings on the Lalit Modi issue, damages awarded, calculation methods, stadium-related issues, delay in share transfer approval, and interest rate determinations.

The opposite party asserted that tweets made by Lalit Modi were not attributable to it and pre-dated the KCPL Agreement. It also argued that there was no actual loss to KCPL, and its damages claim was belated. On the stadium issue, the KCPL Agreement permitted alternate venues, and KCPL had itself requested JN Stadium.

Regarding change in match format, it was submitted that the decision pre-dated the KCPL Agreement and was within the opposite party’s discretion under the ITT and operational rules. On share transfer, it was contended that a 5% holding by Mr. Vivek Venugopal did not amount to a “Change of Control.”

It was further argued that there was no deemed extension for the bank guarantee deadline under Clause 21.5, which required signed variation. The opposite party’s conduct did not amount to waiver under Clause 21.8. The damages award was challenged as contradictory and exceeding the limitation of liability clause (Clause 20). The interest rate was also alleged to be inconsistent with Clause 21.11.

In RSW’s case, additional objections included alleged invalid reference to arbitration under Section 19(2)(a) of the Indian Partnership Act, 1932, due to Filmwaves not authorising arbitration, and ineligibility of RSW under Section 69(3) as an unregistered firm.

The Court stated, "This Court exercising jurisdiction under Section 34 of the Arbitration Act cannot act as a Court of First Appeal. A review on merits is largely proscribed." It recorded that "BCCI has called upon this Court to venture into a fact-finding exercise by revisiting and re-appreciating the record and accepting competing interpretations of the various clauses of the agreements between the parties, by invoking the ground of perversity."

It was observed, "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." The Court further stated, "It is not open for this Court to revisit the findings of facts arrived at by the Arbitral Tribunal after the appreciation of evidence and documents on record or to interfere with the Award on the ground that the terms of the contract were not correctly interpreted by the learned Arbitrator."

The Court noted that "BCCI had at no point of time between April, 2011 and 17th September, 2011, when BCCI terminated the KCPL-FA, claimed any breach, much less an irremediable breach by KCPL of the KCPL-FA by non-furnishing of the bank guarantee." Further, "There were various extensions granted which the learned Arbitrator has held were due to the unresolved issues as aforestated." The Court remarked, "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."

On BCCI’s contentions regarding Clause 21.5, the Court observed, "These contentions are untenable in view of the conduct of BCCI which was to acquiesce in the request of KCPL for extension of the deadline for furnishing of the bank guarantee and thus BCCI is estopped by such conduct from making such contentions." The Court found, "no reasonable notice was given by BCCI to KCPL for furnishing of a bank guarantee."

Regarding damages, the Court stated, "KCPL has not restricted its claim for damages to any particular type of damages." The Arbitrator "has adopted his own approach for the purpose of computing the damages payable by BCCI to KCPL." It recorded that "the learned Arbitrator has resorted to ‘another method’ available for the purpose of computing damages suffered by KCPL."

Concerning a 25% vs. 50% discrepancy, the Court observed, "the mention of 25% is obviously a typographical error in the impugned award." It stated, "I do not find merit in the submission on behalf of BCCI that KCPL is precluded from terming the error in the award as a typographical error, since it did not prefer an application under Section 33 of the Arbitration Act."

It was recorded, "the learned Arbitrator has considered the expert evidence led and in Paragraph 8.1.14 of the KCPL Award opined, it will not be advisable to go by an expert assessment, which at the end would only be an option." On general and special damages, the Court noted, "The grant of special damages in addition to general damages is not unknown to law."

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On RSW's arbitration, the Court stated, "there is no merit in the plea that the fact of Filmwaves not joining the reference had been concealed from BCCI." The Arbitrator held that "Filmwaves has not objected to its non-joinder of the reference and has infact supported RSW in its claim." On Section 69(3), the Court stated, "this is not applicable to arbitral proceedings as held in Komal Kush Enterprises."

The Court held that Arbitration Petition No. 1752 of 2015 and Arbitration Petition No. 1753 of 2015 were devoid of merit and accordingly dismissed them. The Court permitted the successful claimants to withdraw the amounts deposited by the opposing party after a period of four weeks from the uploading of the judgment and order. Considering that a conditional stay had operated on the awards for several years, the Court extended the period by a further two weeks. Accordingly, the successful parties were allowed to withdraw the deposited amounts after six weeks from the date of uploading the judgment and order. The Court specified that there would be no order as to costs.

Advocates Representing the Parties:

For the Petitioners: Mr. Rafiq A. Dada, Senior Advocate and Mr. T. N. Subramanian, Senior Advocate a/w Mr. Aditya Mehta, Ms. Shivani Garg, Mr. Agneya Gopinath and Mr. Dhruv Chhajed i/b Cyril Amarchand Mangaldas.

For Respondents: Mr. Vikram Nankani, Senior Advocate a/w Mr. Sajal Yadav, Mr. Rohan Rajadhyaksh, Mr. Sumeet Nankani, Mr. Anukula Seth, Mr. Aayushya Geruja and Ms. Vineetha Khandelwal i/b Mr. Gurdeep Singh Sachar, Mr. Rohan Rajadhyaksh i/b Ms. Nipa S. Gupte.

Case Title: BCCI v. Kochi Cricket Pvt. Ltd. & Ors.
Neutral Citation: 2025: BHC-OS:8865
Case Number: Arbitration Petition Nos. 1752 and 1753 of 2015
Bench: Justice R. I. Chagla

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