Reportable in the High Court of Judicature at Bombay
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Board of Control for Cricket in India vs Deccan Chronicle Holding Ltd CARBPL-4466-20-J.docx GP A/W AGK & SSM REPORTABLE IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION IN ITS COMMERCIAL DIVISION COMM ARBITRATION PETITION (L) NO. 4466 OF 2020 Board of Control for Cricket in India, a society registered under the Tamil Nadu Societies Registration Act 1975 and having its head office at Cricket Centre, Wankhede Stadium, Mumbai 400 020 … Petitioner ~ versus ~ Deccan Chronicle Holdings Ltd, a company incorporated under the Companies Act 1956 and having its registered office at 36, Sarojini Devi Road, Secunderabad, Andhra Pradesh … Respondent appearances Mr Tushar Mehta, Solicitor General, with FOR THE PETITIONER Samrat Sen, Kanu Agrawal, Indranil “BCCI” Deshmukh, Adarsh Saxena, Ms R Shah and Kartik Prasad, Advocates i/b Cyril Amarchand Mangaldas Page 1 of 176 16th June 2021 ::: Uploaded on - 16/06/2021 ::: Downloaded on - 16/06/2021 20:04:41 ::: Board of Control for Cricket in India vs Deccan Chronicle Holding Ltd CARBPL-4466-20-J.docx Mr Haresh Jagtiani, Senior Advocate, with Mr Navroz Seervai, Senior Advocate, FOR THE RESPONDENT Mr Sharan Jagtiani, Senior Advocate, “DCHL” Yashpal Jain, Suprabh Jain, Ankit Pandey, Ms Rishika Harish & Ms Bhumika Chulani, Advocates i/b Yashpal Jain CORAM : GS Patel, J JUDGMENT RESERVED ON : 12th January 2021 JUDGMENT PRONOUNCED ON : 16th June 2021 JUDGMENT: OUTLINE OF CONTENTS This judgment is arranged in the following parts. A. INTRODUCTION ........................................................................ 4 B. THE CHALLENGE IN BRIEF; SUMMARY OF CONCLUSIONS................................................ 6 C. THE AMBIT OF SECTION 34 .................................................. 10 D. THE FRANCHISE AGREEMENT OF 10TH APRIL 2008 ...................................................................... 17 E. RELEVANT DATES AND EVENTS ........................................ 31 F. OPERATIVE PORTION OF THE AWARD ............................. 64 G. BRIEF ANALYSIS OF THE AWARD ....................................... 66 H. THE AWARD’S FINDINGS ON THE VALIDITY OF THE TERMINATION: RIVAL ARGUMENTS CONSIDERED ...................................................................... 77 (1) Necessity of a “show-cause notice” .................................. 77 Page 2 of 176 16th June 2021 ::: Uploaded on - 16/06/2021 ::: Downloaded on - 16/06/2021 20:04:41 ::: Board of Control for Cricket in India vs Deccan Chronicle Holding Ltd CARBPL-4466-20-J.docx (2) Premature Termination ..................................................... 86 (3) Substantial Compliance ..................................................... 91 (a) Players’ Fees ........................................................... 92 (b) Bank Charges ........................................................ 100 (c) Charge on franchise vs charge on its receivables ................................................... 108 (d) The concept of ‘substantial compliance’ ............. 109 (4) No Insolvency Event ........................................................ 112 (5) Unfair Discrimination ...................................................... 116 (a) No pleading ............................................................ 117 (b) Finding outside the contract ................................. 122 (c) The contract required BCCI to pay DCHL’s players’ dues .......................................... 124 (d) Public law principles in arbitral decision-making .................................................... 127 (e) The Arbitrator as ‘amiable compositeur’: decision ex aequo et bono ........................................ 132 (6) Reddy’s letter of 29th August 2012 obtained by duress ........................................................... 134 (7) Remaining findings on termination.................................. 140 I. DAMAGES AWARDED: RIVAL ARGUMENTS CONSIDERED .................................................................... 142 (1) Specific performance & damages in lieu of specific performance .................................................... 142 (2) Damages awarded ............................................................ 155 J. DCHL’S ATTEMPT TO FURNISH REASONS FOR THE AWARD IS IMPERMISSIBLE ............................... 168 K. INTEREST .................................................................... 173 L. FINAL ORDER & COSTS IN THESE PROCEEDINGS .................................................................... 174 For convenience, the soft copy in PDF of this judgment is bookmarked. Page 3 of 176 16th June 2021 ::: Uploaded on - 16/06/2021 ::: Downloaded on - 16/06/2021 20:04:41 ::: Board of Control for Cricket in India vs Deccan Chronicle Holding Ltd CARBPL-4466-20-J.docx A. INTRODUCTION 1. The Board of Control for Cricket in India (“BCCI”) is the game’s governing body in India. It is vastly influential across the cricketing world and is said to be the wealthiest such board globally. 2. In this Petition under Section 34 of the Arbitration & Conciliation Act, 1996, BCCI takes exception to a 17th July 2020 award by a learned Sole Arbitrator. 3. BCCI was the respondent in arbitration. The claimant was Deccan Chronicle Holdings Ltd (“DCHL”), the publisher of the Deccan Chronicle, an English daily newspaper with eight editions widely circulated across South India. It also publishes the Asian Age, an English newspaper with editions in major Indian metros and London, and the Financial Chronicle, a financial daily. DCHL also operated a cricketing franchise in the Indian Premier League (“IPL”) and owned the Deccan Chargers team. 4. By the impugned award, the learned Sole Arbitrator directed BCCI to pay DCHL: (i) Rs 4814,17,00,000/- (Rupees Four Thousand Eight Hundred and Fourteen Crores and Seventeen Lakhs); (ii) Interest on this amount at 10% per annum from the date of the arbitration proceedings; and (iii) Rs. 50,00,000 (Rupees Fifty Lakhs) in costs. Page 4 of 176 16th June 2021 ::: Uploaded on - 16/06/2021 ::: Downloaded on - 16/06/2021 20:04:41 ::: Board of Control for Cricket in India vs Deccan Chronicle Holding Ltd CARBPL-4466-20-J.docx 5. Conceived in 2007, the IPL arguably changed the face of cricket in India forever. It is a cricket league in the Twenty20 or T20 format. Eight teams contest. Team players are drawn from across the cricketing world, not just India. It is usually held between March and May of each year. Reportedly, it is the most-attended cricket league ever, anywhere. So far, there have been thirteen seasons; the fourteenth was interrupted by the recent lockdown. The usual format is a round-robin home-and-away format in the league phase. After that are the playoffs, then two qualifying matches and an eliminator match. Participating teams ‘acquire’ players — for mind-boggling amounts — in different ways. There is an annual player auction — the possibility of ‘trading’ players during defined time windows (two before the auction, one after but before the tournament) and signing up replacements for unavailable players. At the auction, players sign up and set their base price. They are then ‘bought’ by the highest- bidding franchise. Some remain ‘unsold’. These can be signed up as replacements. Trading happens only with the player’s consent (and payment of the differential, if any, between the old and new contracts) — if the new contract has a higher value, the player gets a share in the difference. Other rules operate: each squad must have between 18 and 25 players with a maximum of eight overseas players and only four in the playing eleven. There is a cap to the salary of the entire squad. Under-19 players are eligible only if they have played first-class cricket. 6. There are eight teams in play today, owned by different franchises. Over time, five others fell by the wayside, DCHL’s Deccan Chargers among them. It was one of the original eight teams. It debuted in 2008 and was dissolved in 2012. Kochi Tuskers Kerala, Page 5 of 176 16th June 2021 ::: Uploaded on - 16/06/2021 ::: Downloaded on - 16/06/2021 20:04:41 ::: Board of Control for Cricket in India vs Deccan Chronicle Holding Ltd CARBPL-4466-20-J.docx Pune Warriors India, Rising Pune Supergiant and Gujarat Lions all collapsed between 2011 and 2018. 7. BCCI had agreements with every franchise. DCHL’s Franchise Agreement is dated 10th April 2008. The reciprocal rights and obligations in this contract are the matters in dispute. B. THE CHALLENGE IN BRIEF; SUMMARY OF CONCLUSIONS 8. Appearing for BCCI, Mr Mehta, the learned Solicitor-General, assails the Award on several distinct grounds, including— 8.1 Some findings and conclusions in the Award fit the legal definition of ‘perversity’ as part of ‘patent illegality’— it was and is impossible for anyone to arrive at such conclusions; 8.2 Some conclusions are entirely bereft of reasons — again, a dimension of patent illegality. 8.3 The Award takes into account wholly irrelevant material, including material not on record; 8.4 The Award travels well beyond the contract. 8.5 In places, the Award attempts to rewrite provisions of the contract. 8.6 The Award purports to do that which the Arbitration Act says in Section 28(2) no arbitral tribunal can do, in that it decides ex aequo et bono or amiable compositeur, Page 6 of 176 16th June 2021 ::: Uploaded on - 16/06/2021 ::: Downloaded on - 16/06/2021 20:04:41 ::: Board of Control for Cricket in India vs Deccan Chronicle Holding Ltd CARBPL-4466-20-J.docx although there is no provision in the contract enabling the arbitral tribunal