[Breaking] Bombay High Court sets aside arbitration award directing BCCI to pay over Rs 4,800 Crores for termination of Deccan Chargers from IPL

In a major relief to the BCCI, the Bombay High Court on Wednesday set aside an arbitration award directing the Board of Control for Cricket in India (BCCI) to pay over Rs 4,800 crores to Deccan Chronicle Holdings Ltd (DCHL) over the allegedly illegal termination of their IPL franchise team, Deccan Chargers, Hyderabad from Indian Premier League (IPL) cricket..Justice Gautam Patel set aside the award passed by retired Supreme Court Justice CK Thakkar who was appointed as sole arbitrator by the High Court to decide whether BCCI's termination notice to DCHL's IPL franchise team, Deccan Chargers, was illegal.He however upheld the award to the extent of Rs. 36 crores which was admittedly amount due to be received by DCHL from BCCI out of which an amount of Rs.1.83 crores had been paid. He also awarded costs of Rs 10 lakhs under section 35 of the Code of Civil Procedure to be paid by DCHL to BCCI having regard to the expenses, the number of days of hearing, and the enormous volume of documentation BCCI has had to put together.So a total of Rs. 34.17 crore with interest as per the award was directed to be paid to DCHL..The arbitration award was passed on July 17, 2020 by which the arbitrator directed BCCI to pay DCHL Rs 4814.17 crores plus 10% interest from 2012, in addition to Rs 50 lakhs costs, upon finding that the BCCI's termination of the Deccan Chargers team from IPL was illegal. The dispute is stated to have arisen in 2012 during the fifth season of IPL cricket from the franchise agreement entered into between BCCI and DCHL in 2008. A notice terminating the franchise agreement was served in September 2012 on DHCL, which was the cause of dispute between the two parties. The arbitration proceedings were initiated thereafter by DHCL, for which the as the sole arbitrator. His award directing BCCI to pay over Rs 4,800 crores to DHCL has now been set aside by the High Court. .BCCI's submission was that the agreement merely provided for types of breaches based on whether they could be cured or not and if either of the parties commits a breach which cannot be remedied, termination with notice was the only solution. It submitted that an occurrence of an "insolvency event" was an agreed reason of termination of the agreement. The arbitrator had held that a show cause notice was necessary to the contract, however this was disputed by BCCI which stated that the agreement did not provide for show cause. Any notices sent prior to the termination notice were merely notices to remedy any curable breaches caused by DCHL.BCCI further submitted that as on September 14, 2012 there was a winding up petition petition pending against DCHL which gave rise to invocation of the termination clause of the agreement. One of the arguments of DCHL was that termination was invalid as it was discriminatory against them in comparison to the other teams in the league.BCCI claimed they had no opportunity to meet this particular case, leading to a failure of natural justice and fair play as DCHL had no pleading.DCHL argued that it had substantially cured the defects pertaining to payment of players' fees and bank charges. Due to this reason, they claimed that the termination notice was premature..Having considered the rival submission, documentary material and the decisions cited, the Court concluded that the arbitration award cannot be sustained.At the broadest level, the court noted there were three defaults all of which continued and were not cured.The Court observed that the certain portions in the award did not have reasons, certain other portions seemed to have ignored evidence and and in yet other portions "wandered far from the contract" by taking views which "no reasonable person could have done".In doing so, it brushed aside objections about insufficient pleadings, and effectively rewarded the party in unquestionable breach of its contractual obligations, Justice Patel noted while setting aside the Award..Solicitor General Tushar Mehta with Advocates Samrat Sen, Kanu Agrawal, Indranil Deshmukh, Adarsh Saxena, R Shah and Kartik Prasad briefed by Cyril Amarchand Mangaldas represented BCCI.Senior Advocates Haresh Jagtiani, Navroz Seervai, Sharan Jagtiani with Advocates Yashpal Jain, Suprabh Jain, Ankit Pandey, Rishika Harish and Bhumika Chulani appeared for DCHL..[Read judgment]