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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G.S.PATEL, J
Board of Control for Cricket in India - Appellant
Versus
Deccan Chronicle Holdings Ltd - Respondent
Comm Arbitration Petition (L) No. 4466 of 2020
Decided on : 16-06-2021
Arbitration & Conciliation Act, 1996 - Section 34 - Arbitration Award - Grounds for setting aside Award - Explained - Board of Control for Cricket in India - Franchise Agreement - Termination of - Loss of reputation - Damages for breach - Claim of amount - Discounting methods - Three defaults - not paying players and others, creating charges on assets, and the insolvency event (the IFCI winding-up petition) - Claimant is entitled to Rs.630 Crore or any other amount on account of wrongful termination of Franchise Agreement by the Respondent.
Finding of the Court:
Even if there is no accurate method to compute damages for loss of reputation, this does not mean that there can be a total disregard of the principles underlying Section 73 of the Contract Act - On the question of loss of reputation, for instance, there were clearly two aspects. First, proof of reputation (its existence) and its loss. This was a question of fact, and had to be proved. Second, damages for this proven loss of reputation, and which might have been an approximation or an estimate. The first was indispensable. The Award has no reasons and points to no evidence. It simply assumes that there was a reputation and it was lost. Neither the reputation nor the loss are matters of presumption. They are matters of fact and demand some level of proof. That requires some discussion of evidence, and reasons -Three defaults - not paying players and others, creating charges on assets, and the insolvency event (the IFCI winding-up petition). The contract said the first two were curable; if uncured, they invited termination. The third could trigger immediate termination (leaving aside the fact that BCCI gave time to DCHL to have this resolved as well). Not one of the three is convincingly shown to have been cured or not to exist. All three continued. The Award proceeded in places without reasons, in others by ignoring evidence, in yet others by wandering far afield from the contract, and in taking views that were not even possible. In doing so, it brushed aside objections about insufficient pleadings. It granted reliefs not even prayed for, and took views that were not possible, i.e. that no reasonable person could have done. Effectively, it rewarded the party in unquestionable breach of its contractual obligations. That is inconceivable and not even a possible view - DCHL has since faced insolvency proceedings under the Insolvency and Bankruptcy Code, 2016. If BCCI cannot make payment to DCHL directly on account of any statutory embargo or order of a court or authority, BCCI will be required to make payment to DCHL’s successor-in-title or the authority or entity entitled in law to receive the amount.
Result: Petition disposed of
JUDGMENT :
OUTLINE OF CONTENTS
This judgment is arranged in the following parts.
B. THE CHALLENGE IN BRIEF;
SUMMARY OF CONCLUSIONS................................................ 6
C. THE AMBIT OF SECTION 34 .................................................. 10
D. THE FRANCHISE AGREEMENT OF10TH 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
(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.
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:
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