BCCI vs Kochi Tuskers Kerala: Bombay High Court Orders BCCI To Pay ₹538 Crore In Major IPL Dispute

The Bombay High Court upheld a ₹538 crore arbitral award against BCCI in favour of Kochi Tuskers Kerala, rejecting BCCI’s challenge. Scroll down for more details.

BCCI vs Kochi Tuskers Kerala

In a major setback for the Board of Control for Cricket in India (BCCI), the Bombay High Court has upheld an arbitral award amounting to ₹538 crore in favour of the owners of the now-defunct IPL franchise, Kochi Tuskers Kerala. The judgment was delivered by Justice RI Chagla, who ruled that the court could not act as an appellate authority over the arbitrator’s decision.

The Origin of the Dispute

The controversy dates back to 2011 when BCCI terminated the contract of Kochi Tuskers Kerala, which was originally awarded to a consortium led by Rendezvous Sports World (RSW) and later operated by Kochi Cricket Private Limited (KCPL). The BCCI claimed the termination was due to KCPL’s failure to furnish a required bank guarantee by March 2011.

However, the franchise argued that unresolved issues including stadium availability, shareholding approvals, and a sudden reduction in the number of IPL matches hindered their ability to meet the deadline. They also pointed out that BCCI continued to accept payments and engage with the franchise for several months before suddenly terminating the agreement and encashing a previous guarantee provided by RSW.

Arbitration Favouring the Franchise

Following the termination, both KCPL and RSW initiated arbitration proceedings in 2012, challenging the BCCI’s decision. In 2015, the arbitral tribunal ruled in their favour, awarding ₹384 crore to KCPL for losses and ordering the return of over ₹153 crore to RSW, along with interest and legal costs.

BCCI’s Challenge Rejected

BCCI challenged the arbitral award under Section 34 of the Arbitration and Conciliation Act, arguing that KCPL’s failure to provide the bank guarantee was a clear breach of contract. The cricket board also claimed that awarding both loss of profits and wasted expenditure was excessive and violated the contract’s damage cap. Additionally, it argued that RSW’s arbitration claim was invalid under the Indian Partnership Act.

However, the High Court dismissed these arguments, stating that its jurisdiction under Section 34 is very limited. Justice Chagla noted that BCCI’s attempt to challenge the award based on the merits of the evidence did not hold ground.

Court’s Firm Stand on Limited Intervention

“The jurisdiction of this Court under Section 34 of the Arbitration Act is very limited,” the Court said. “BCCI’s dissatisfaction as to the findings rendered in respect of the evidence and/or the merits cannot be a ground to assail the Award,” it added, refusing to interfere with the arbitration panel’s findings.

What This Means for BCCI

The decision upholding the ₹538 crore award is a significant financial and reputational blow to the BCCI. It also sets a precedent reinforcing the autonomy of arbitral tribunals and limiting the scope of judicial intervention. The ruling could lead to more scrutiny of how IPL contracts are managed and terminated in the future.