Bombay High Court terminates arbitration order in Deccan Chronicle versus BCCI case

The Bombay High Court today terminated the arbitration order in the case between Deccan Chronicle Holdings Ltd (DHCL) and the Board of Control for Cricket in India (BCCI ). The BCCI appealed against the status quo ordered by the arbitrator on the cricket board's decision to terminate its franchise Deccan Chargers.

"An arbitrator cannot overrule an order passed by the court," the high court said.

The court had earlier stayed the order of the arbitrator. The stay was granted by Justice R.D. Dhanuka on an appeal filed by the BCCI under Section 37 of Arbitration and Conciliation Act.

“BCCI moved an appeal against the Order of Arbitrator and the same was heard today morning. The Hon’ble High Court was pleased to stay the Order of Arbitrator after hearing both the parties. Thus, the termination of DC Franchise stands,” the board said in a statement.

The beleaguered owners of Deccan Chargers failed to produce a Rs 100-crore bank guarantee before the high court, a condition that had been set for the struggling team's survival in the league. They later approached the court-appointed arbitrator, retired Supreme Court judge C.K. Thakkar, who had passed the order granting status quo till October 17. However, with this development, the BCCI could not go ahead with the termination of Deccan Chargers from the Indian Premier League (IPL).

Being aggrieved, the cricket board moved the high court and secured a stay.

The company's failure to furnish the guarantee money before the 5 p.m. deadline on Friday effectively meant that the BCCI's termination of the team stood and the board was free to float the tender for a new franchise.

Sources have told NDTV that DCHL is likely to appeal to the division bench against the high court’s stay order.

Franchise sale
Last Friday, before the 5 p.m. deadline, Deccan Chronicle had announced that it is selling the franchise to Mumbai-based real estate company Kamla Landmarc for Rs 1,000 crore.

However, with the termination of the license, sources say, there are concerns that the new buyer may back out.

The stay order by the high court is also likely to create troubles for the company with its bankers.

According to sources, banks are willing to extend further funding only if Deccan Chargers license stands.

BCCI v/s Deccan
The BCCI had, on September 15, taken the decision to terminate the contract at an emergency IPL governing council meeting in Chennai which was challenged by DCHL in the Bombay High Court.

The court had on October 1 asked DCHL to give the bank guarantee which would be in force for a period of one year. The judge had also observed that BCCI had at all stages acted in haste in terminating the franchise agreement with DCHL and not granted it time to cure the defects.

The court had on October 1 ordered DCHL to bear all expenses for IPL 6 including making payments to BCCI towards franchise, players and support team costs. Besides, it was asked to bear the costs of conducting matches and other expenses.

In the event of any default on part of DCHL, BCCI shall be entitled to invoke the bank guarantee to the extent necessary, Justice Kathawala had ruled.

Being aggrieved, BCCI had filed an appeal against the October 1 order of the High Court.

The court had also appointed an Arbitrator – retired Supreme Court judge C K Thakkar to resolve the dispute between BCCI and DCHL over the termination of Deccan Chargers franchise within three months. It had asked BCCI not to act on the termination of the franchise agreement for a period of seven days.

However, the court had clarified that if Deccan fails to furnish the bank guarantee, the license was to be cancelled.

Unable to arrange for Rs. 100 crore in time, Deccan had applied for an extension of deadline, which was earlier granted by the Arbitrator on Friday. This was today stayed by the High Court.

With inputs from Press Trust of India