NCLT admits insolvency plea by BCCI against Byju's; dismisses latter's plea for arbitration

The National Company Law Tribunal (NCLT) at Bengaluru on Tuesday admitted an insolvency plea filed by the Board of Control for Cricket in India (BCCI) against the parent company of ed-tech firm, Byju's over a ₹158 crore debt [BCCI v. Think & Learn Pvt. Limited]..A coram comprising Judicial Member K Biswal and technical member Manoj Kumar Dubey admitted the BCCI's plea this morning, appointed Pankaj Srivastava as an interim resolution professional (provided he consents to the appointment within a week) and called for progress reports every two weeks.The order was passed after finding that it stood established that Byju's had defaulted on a debt due to the BCCI over Indian cricket team's jersey sponsorship deals. "Accordingly, this Adjudicating Authority is of the considered opinion that there is no reason to deny the petition filed under section 9 of the IBC, 2016 by the Operational Creditor to initiate CIRP against the Corporate Debtor, since the existence of a debt and a default in the payment of debt is clearly established. Therefore, the instant Company Petition bearing CP (IB) No. 149/2023 is admitted against the Corporate Debtor and moratorium is declared in terms of Section 14 of the Code," stated the order..The tribunal also dismissed an application by Byju's to refer the matter to arbitration. "It is abundantly clear as laid down by the Hon’ble Apex Court that the Adjudicating Authority has to either reject or Admit the Application and cannot postulate a third option. In this matter, the application U/s 9 of the IBC has been admitted by the Order passed today, therefore, the application for referring the matter for Arbitration is not maintainable," the order stated in this regard. .The dues cited by BCCI were payable in respect of an agreement with Byju's to sponsor the jerseys of the Indian cricket team. The sponsorship contract was entered into between BCCI and Byju's initially in 2019, when it took over sponsoring the cricket team's jerseys from mobile phone manufacturer OPPO. As per reports, this contract initially ended in 2022 but it was later extended for 2023.In January 2023, amid reports of various other financial troubles for the ed-tech company, Byju's announced that it would not be renewing its sponsorship deal with BCCI as well as other partnerships with the International Cricket Council (ICC) and Fédération internationale de football association (FIFA).Later that year, BCCI filed its plea to initiate the corporate insolvency resolution process (CIRP) against Byju's. The NCLT sought a response from Byju's in November 2023. .Byju's opposed the BCCI's plea on various grounds, including that the agreement between it and BCCI did not involve any "services" and only involved the transfer of certain rights. Therefore, BCCI could not be viewed as an "operational creditor" who was entitled to file a CIRP application against Byju's under the Insolvency and Bankruptcy Code (IBC), it was argued. Byju's also asserted that BCCI had not proved that there was a default of a debt by the former. There were pre-existing disputes as well between the parties which would stand in the way of initiating CIRP, Byju's said.All these arguments were rejected by the NCLT in its July 16 order. Among other observations, the tribunal observed that there were emails between the parties which pointed towards the existence of a debt due from Byju's to the BCCI. "The Respondent herein (Think & Learn) has time and again acknowledged and duly planned a repayment schedule for the outstanding dues by sending the above mentioned emails; the condition of there being a ‘Debt’ and a ‘Default’ for the purposes of Section 9 of the IBC is held to be satisfied," the NCLT said. .Senior Advocate CK Nandakumar and advocates Krishnava Dutt (Managing Partner), Adity Chaudhury and Bhavya Mohan (Partners), Ann Pereira and Anjali Kutiyal (Associates), assisted by Anushkaa Shekhar, Navya Pathak and Mayuri Kalelkar from Argus Partners represented BCCI.Senior Advocate Pramod Nair and advocates Waseem Pangarkar, Nadiya Sarguroh, Yashowardhan Dixit, Aditi Tiwari, Arunima Kumari briefed by MZM Legal LLP represented Byju's. .[Read Order]