Safiya Malik

The High Court of Calcutta Single Bench of Justice Ravi Krishan Kapur has dismissed an application filed under Section 34 of the Arbitration and Conciliation Act, 1996. The petition challenged an arbitral award dated 9 December 2018, read with a supplementary award dated 8 March 2019, on multiple grounds including alleged perversity, violation of natural justice, and erroneous interpretation of the contract. The Court, after detailed scrutiny of the arbitral tribunal's findings and the contentions raised, found no merit in the objections and upheld the award. The impugned arbitral award had directed payment of Rs.14,49,91,000 along with interest and costs in favour of the respondent.

Justice Ravi Krishan Kapur held that the arbitrators had acted within their domain and had offered a reasoned determination based on contractual interpretation and available evidence. Stating the restricted scope of judicial interference under Section 34, the Court observed that the award was not arbitrary, capricious, or contrary to the fundamental policy of Indian law. Consequently, the application under Section 34 was dismissed, and the arbitral award stood confirmed.

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The matter arose from a Player Representation Agreement (PRA) dated 22 October 2003, executed between the respondent, an internationally reputed cricketer, and petitioner no.2, under which petitioner no.2 was appointed as the respondent’s sole and exclusive manager and agent. On 21 April 2007, the rights and obligations under the PRA were assigned by petitioner no.2 to petitioner no.1 through a deed of assignment.

Disputes emerged following the termination of the PRA by petitioner no.1. The respondent claimed that the petitioners failed to deposit revenues received from various contracts into the escrow account as required under the PRA and further alleged unauthorized withdrawals by the petitioners. The respondent sought recovery of unpaid sums, invoking arbitration in accordance with the terms of the PRA.

The arbitral reference was made to a tribunal consisting of three arbitrators. The tribunal unanimously held the respondent entitled to the balance of the minimum guaranteed amount, after deductions, and awarded Rs.14,49,91,000 with interest at 12% per annum from 21 November 2007 until the date of award, and further interest at the same rate until realization. The tribunal also awarded litigation costs of Rs.50,00,000 to the respondent.

The petitioners challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996 on several grounds:

• The tribunal's conclusion that the termination of the PRA on 21 November 2007 was invalid.

• The alleged failure of the tribunal to consider earnings received by the respondent under a contract dated 21 August 2008 with Knight Riders Sports Private Limited (KKR).

• The tribunal's disregard of audit reports prepared by M/s. Patkar & Pendese.

• The tribunal's failure to recognize that petitioner no.2 was no longer liable post-assignment of the PRA to petitioner no.1.

It was contended by the petitioners that Clause 15 of the PRA, in conjunction with Schedule IV, conferred upon them the right to terminate the agreement at any time upon the occurrence of non-selection events as defined in the PRA. The petitioners relied upon the respondent’s non-selection in the Indian cricket team from February 2006 to November 2006 as the triggering event.

The petitioners argued that the reselection of the respondent on 30 November 2006 did not extinguish their termination rights. They further contended that continued dealings with the respondent post-termination did not amount to waiver of rights under the PRA.

The tribunal, however, held that the right to terminate ceased with the respondent's reselection, and the petitioners' subsequent conduct indicated waiver. It also rejected claims regarding the KKR contract, concluding that the respondent participated in promotional activities as part of a team and not as an individual personality.

The tribunal found no merit in relying upon the audit reports, noting that no evidence was led to support them, and no representative of the audit firm was examined. It also recorded that the respondent relied on an admission in a letter dated 10 September 2007 by petitioner no.1.

With respect to the claim that petitioner no.2 had been discharged from liability post-assignment, the Court noted the absence of pleadings or arguments before the tribunal on this issue, concluding that the petitioners were estopped from raising it for the first time in this proceeding.

Justice Kapur observed: "The Arbitral Tribunal has elaborately taken into account all the above aspects in arriving at the conclusion that the petitioner had no right of termination. The Arbitral Tribunal has dealt with each of the points raised by the petitioners and also taken into account the contemporaneous conduct of the parties."

Regarding the tribunal’s interpretation of the PRA, the Court stated: "The construction of the terms of the contract is exclusively for the Arbitral Tribunal. The findings in the award are based on a detailed consideration of the PRA, correspondence and evidence of the parties including their respective financial records."

In response to the challenge on evidentiary grounds, the Court observed: "The Arbitral Tribunal being the ultimate master of the quantity and quality of evidence, the Court must respect the view of the Arbitral Tribunal."

On the validity of the termination, Justice Kapur recorded: "The Tribunal is the last word on facts. In such circumstances, there is also nothing which warrants interference with the view taken by the Arbitral Tribunal."

In relation to the KKR contract, the Court stated: "The reasoning of the Arbitral Tribunal in this regard is within the permissible bounds of arbitral discretion under section 34 of the Act."

On the issue of waiver, it was observed: "There is a clear waiver by Percept of the notice dated 21 November, 2007."

With respect to the audit reports, the Court noted: "There is nothing sacrosanct about the Certificates. Mere filing of a certificate by an auditor or a chartered accountant without examining the author or giving an opportunity of cross examination does not constitute proof of the contents thereof."

Referring to the limited scope under Section 34, Justice Kapur observed: "The Court does not act as an Appellate Court nor re-appreciate evidence findings rendered by the Tribunal. There is a limited and circumscribed scope of interference only on the grounds enumerated under section 34 of the Act."

"The view of the Arbitral Tribunal is both a possible and plausible view and warrants no interference."

Justice Ravi Krishan Kapur concluded that the arbitral tribunal had not acted arbitrarily, perversely, or outside its jurisdiction. The award was reasoned and addressed all the contentions raised before it.

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The Court stated: "Within the parameters enumerated under the Act, a Court must confine itself to the specific grounds for challenging an award as enumerated under the Act and prevent them from assuming the role of ‘a Trojan Horse allowing merits review’."

"There is no merit in this application. There are no grounds which justify any interference with the impugned award. AP-COM 167 of 2024 is dismissed, without any order as to costs."

Advocates Representing the Parties:

For the Petitioners: Mr. Surojit Nath Mitra, Senior Advocate, Mr. Rajarshi Dutta, Advocate, Mr. Sarbajit Mukherjee, Advocate, Mr. Ranajit Kr. Basu, Advocate, Mr. Prayag Kandhar, Advocate

For the Respondents: Mr. Samrat Sen, Senior Advocate, Mr. Paritosh Sinha, Advocate, Mr. Amitava Mitra, Advocate, Mr. S. Dutt, Advocate, Ms. Sonia Nandy, Advocate, Mr. Naman Agarwal, Advocate

Case Title: Percept Talent Management Limited and Anr. vs Sourav Chandidas Ganguly

Case Number: AP-COM/167/2024

Bench: Justice Ravi Krishan Kapur