BCCI granted relief from paying INR 4816 crore to Deccan Chargers

The Deccan Chargers players gather mid-pitch AFP

The BCCI has been relieved of paying up INR 4816 crore (USD 642 million approx) after the Bombay High Court set aside the arbitration award won by Deccan Chronicle Holdings (DCHL), the promoter of the former IPL franchise Deccan Chargers, on Wednesday.

Justice GS Patel ruled that the award had "rewarded the party in unquestionable breach of its contractual obligations" and there wasn't sufficient evidence that Deccan Chargers weren't in breach of contract during termination.

Deccan Chargers had won the award through an arbitration process initiated by the Bombay High Court after they challenged the termination of their contract in September 2012.

The termination, according to the BCCI, was on account of the franchise failing to meet a 30-day deadline to clear up player dues and other irregularities in their running.

The Chargers also failed a one-month deadline set by the Bombay High Court to put up a INR 100 crore guarantee to stay the termination and the Hyderabad franchise subsequently went to Sun Network, which owns the Sunrisers Hyderabad.

The Bombay High Court then appointed retired Supreme Court Judge CK Thakkar as the sole arbitrator. He found the termination of the Chargers contract both illegal and premature, and awarded the damage based on - among other things - a projected loss in profits over the span of the IPL because of the termination.

The BCCI, represented by India's solicitor general Tushar Mehta, challenged the award in court, however, and Justice GS Patel found that "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."

"We did not agree with the arbitration penalty and welcome the verdict from the honourable court," BCCI secretary Jay Shah was quoted as saying in Hindustan Times. "This comes on the back of our legal win in the WSG case."

This order is likely going to be challenged by Deccan Chargers.

"The high court has set aside the arbitral tribunal's award which means that the BCCI will not be liable to pay INR 4800 crore," said Ashish Pyasi, associate partner Dhir & Dhir Associates, who has represented Deccan Chargers in the past. "The order passed is appealable and can be challenged in the division bench (of the Bombay High Court) under section 37."