HC sets aside arbitrator's award asking BCCI to pay Rs 4,800 cr to DCHL

Deccan Chronicle Holdings, the Hyderabad-based media company that acquired the franchise for $107 million in 2008, then approached the Bombay HC, seeking an order restraining BCCI from taking any step

The Bombay High Court has set aside an arbitration award that asked the Board of Control for Cricket in India (BCCI) to pay a compensation of Rs 4,800 crore plus interest to Deccan Chronicle Holdings, the owner of the terminated Deccan Chargers franchise in the Indian Premier League (IPL) in a matter which involved the termination of the franchise in 2012.

“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”, the single-judge bench of Justice Gautam S Patel said in its order. 

“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”, it further said. 

Deccan Chargers was one of the eight franchises in the cash-rich cricket league when it was started in 2008. Four years later, BCCI terminated Deccan Chargers’ agreement, saying the franchise failed to honour its payment obligations.

Deccan Chronicle Holdings, the Hyderabad-based media company that acquired the franchise for $107 million in 2008, then approached the Bombay High Court, seeking an order restraining BCCI from taking any further step. The HC later appointed C K Thakkar as the arbitrator to settle the dispute.

Deccan Chronicle had filed a claim of Rs 6,500 crore and termed the termination of agreement as illegal. The arbitrator had awarded Rs 4,800 crore, including interest, to Deccan Chronicle. The award was subsequently challenged by the BCCI before the Bombay High Court. 

While setting aside the order, the court has asked BCCI to pay Rs 34.17 crore, which will carry interest, to Deccan Chronicles Holding Limited or its successor-in-title or the authority or entity entitled in law to receive the amount.

Appearing for BCCI, Tushar Mehta, the Solicitor-General submitted that 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.