Board of Control for
Cricket in India Vs. World Sports Group (I) P. Ltd.,
O R D E R
agreement dated 25.3.2009 was executed between the appellant - Board of Control
for Cricket in India ('BCCI' for short) and the respondent in regard to Media Rights
for rest of the World (that is World wide Rights except India) for telecasting the
IPL (the Indian Premier League) Cricket Matches for the period 15.3.2009 to 31.12.2012
and 1.1.2013 to 31.1.2017. By letter dated 28.6.2010, the BCCI rescinded the said
agreement dated 25.3.2009 attributing fraud and misrepresentation to the respondent.
by the termination, the respondent filed a petition under Section 9 of the Arbitration
and Conciliation Act, 1996 ('AC Act' for short) before the Bombay High Court
seeking a direction to restrain BCCI from creating any third party rights in regard
to any of the rights conferred upon the respondent under the agreement dated 25.3.2009.
The said application was
dismissed by learned a single Judge on 20.12.2010. Feeling aggrieved, the
respondent filed an appeal before the Division Bench of the High Court. The
High Court allowed the said appeal by the impugned order dated 23.2.2011 with the
following directions: "26. Considering the aforesaid aspect in our view,
till the Arbitrator is appointed, the respondent is restrained from giving the contract
in question to anyone. During the pendency of this appeal, a statement was made
by the respondent that they will not create any third party interest.
The said protection, in
our view, is required to be continued for a limited period. However, the interim
protection as aforesaid shall continue, provided the petitioner takes appropriate
steps within a period of one month for the purpose of appointing the Arbitrator.
If such proceedings are initiated within one month, such interim protection shall
continue to operate till one week afte the decision is taken by the concerned
court for appointment of Arbitrator. In case the application under Section 11 of
the Act is rejected, this interim protection shall automatically cease to operate.
However, in case,
Arbitrator is appointed, the parties may apply to the Arbitrator, within two weeks
of such appointment for interim relief and till then the interim relief will continue
to operate. If any such application is preferred, the Arbitrator is free to decide
the said application, after hearing both sides on its own merits. It is for the
Arbitrator to decide whether interim protection which is continued is required to
be continued or the prayer for interim protection is required to be rejected or
whether any additional interim protection is required to be granted.
All these aspects are
left to the Arbitrator who shall decide the same in accordance with law, after hearing
both the sides and the observations made in this order shall have no effect as
the said application is required to be decided de novo on its own merits. The
above observations are made only in connection with Section 9 Application and
the same will have no bearing in case any application under Section 11 of the
Act is preferred by the petitioner. The said order is challenged by BCCI in this
appeal by special leave. On 3.3.2011, while issuing notice, this court granted
interim stay of the judgment of the division bench of the High Court, subject
to the condition that BCCI will continue to be bound by its undertaking (given
to the High Court) that it will honour all contracts (sub-licence agreements)
entered into by the respondent.
8.3.2011, BCCI invited tenders for grant of global internet and mobile rights (alongwith
certain television rights) with reference to broadcasting IPL matches for the four
seasons from the year 2011 to 2014. On an application by the Respondent seeking
an interim direction to the BCCI not to proceed or process or act upon its
tender notice dated 8.3.2011 in so far as it related to the rights that had been
exclusively granted to the respondent, this court, after hearing the parties, on
18.3.2011, issued the following interim directions: (1) In regard to the contracts
(sub-Licence Agreements) already entered by the respondent with third parties,
BCCI will be entitled to secure copies of the respective agreements and receive
all payments due under the sub-licence agreement and remit the same to an
Escrow Account with a nationalised Bank. (2) BCCI will be entitled to proceed with
the awarding of Media Rights referred to in the tender notice dated 8.3.2011,
subject to the condition that all amounts /deposits /consideration /licence fee
received shall also be remitted to the said Escrow Account. (3) The bids received
in response to the tender notice dated 8.3.2011 shall be opened, and decision in
regard to award of contract taken, in the presence of Court appointed Observer -
Mr. Justice Mukul Mudgal (Retired Chief Justice of Punjab & Haryana High Court).
BCCI shall make appropriate arrangement for his travel and stay in that behalf.
(4) Out of the amounts remitted to the Escrow Account, BCCI will be entitled to
draw every year, the licence fee that it would have received from the respondent
under the Agreement dated 25.3.2009, if the said agreement had not been terminated.
The remaining amount shall be kept in fixed deposit for a term of one year. The
Said amount shall be dealt with as per the final order of this Court. BCCI
shall file a confirmation from the Bank that the amount will be dealt with as per
the final order of this Court.
pursuance of the said order, we are informed that the bids were considered and in
the presence of the Observer appointed by this Court, the contract was awarded to
M/s. Times Internet Ltd.
the matter came up today, both parties submitted that as the said directions broadly
covered the interests of parties, this matter could be disposed of in terms of the
said interim arrangements made on 18.3.2011 with appropriate modifications.
view of the above, this appeal is disposed of with the following directions:
a. BCCI shall be
entitled to award any of the unawarded sub-licence media rights (to which
respondent was entitled under the agreement dated 25.3.2009), by following the standard
tender procedures. BCCI will be entitled to take all decisions, and do all
acts, that could have been taken or done by the respondent under the agreement dated
25.3.2009, if it had been operational.
b. All amounts/deposits/licence
fees received by BCCI as consideration in respect of sub-licence agreements entered
by the respondent, or by the BCCI after the termination, shall be remitted to
an Escrow Account with a Nationalized Bank.
c. Out of the amounts so
remitted to the Escrow Account, BCCI shall be entitled to draw every year, an amount
equivalent to the licence fee it would have received from the respondent under
the agreement dated 25.3.2009 (if the said agreement had not been terminated), without
prejudice to its rights and contentions.
d. The net annual income
(that is the difference between the total of amounts remitted to the Escrow
Account every year less the amount equivalent to the licence fee that is drawn by
BCCI in terms of agreement dated 25.3.2009) shall be kept in a fixed deposit
for a term of one year. Such fixed deposits shall be renewed yearly till the final
adjudication of the disputes between the respondent and the appellant by a competent
court or arbitral tribunal (if the remedy of arbitration is available or
agreed) as the case may be.
e. BCCI shall file
yearly accounts (after furnishing a copy thereof to the respondent) in regard to
the amounts received, the amount remitted to the Escrow Account, amounts drawn
by BCCI (equivalent to the licence fee under the agreement dated 25.3.2009) and
the net amount invested in fixed deposits.
f. In regard to the amounts
to be received and accounted for by BCCI as aforesaid, the BCCI shall be deemed
to be a Receiver appointed by this Court. Such deemed Receivership will end automatically,
on final decision by the Court/Tribunal before which the disputes are raised,
or on 31.1.2017, whichever is earlier.
contained in the impugned order of the High Court or this order shall be
construed as expression of any opinion on the merits of the dispute. The Court or
the arbitral Tribunal, adjudicating upon the disputes between the parties, will
do so purely on merits on the basis of the material placed before it, uninfluenced
by any observation made in any of the orders till now.
Observer of this Court shall be paid a fees of Rs.1,00,000/- (Rupees one lac only)
by each party apart from meeting his expenses.
to bear their respective costs.
( R.V. RAVEENDRAN )
( A.K. PATNAIK )