Source: Indian Express 

Introduction 

The Bombay High Court on 17th June 2025, delivered a significant judgment rejecting the Board of Control for Cricket in India's (BCCI) challenge to arbitral awards totaling over Rs 538 crore in favor of the defunct IPL franchise Kochi Tuskers Kerala. Justice Riyaz I Chagla upheld the arbitrator's findings, stating the limited scope of judicial intervention under Section 34 of the Arbitration and Conciliation Act, 1996. This ruling provides the sanctity of arbitral proceedings and limits the court's role to procedural oversight rather than merit-based review. 

What was the Background of BCCI v. Kochi Cricket Private Limited and Anr. Case? 

• Kochi Tuskers Kerala participated in only one IPL season in 2011 under a consortium led by Rendezvous Sports World (RSW) and operated by Kochi Cricket Private Limited (KCPL). 
• RSW was co-owned by Sunanda Pushkar who surrendered her shares in April 2010. 
• The franchise agreement was signed between BCCI and RSW on 11th April 2010, with KCPL entering into a separate agreement on 12th March 2011. 

Termination and Dispute: 

• BCCI terminated the franchise agreements on 19th September 2011, citing KCPL and RSW's failure to provide the requisite bank guarantee by March 2011. 
• The termination letter was sent to both KCPL and RSW, alleging breach of contractual obligations regarding the 10% bank guarantee requirement. 
• KCPL attributed the delay to multiple factors including non-availability of a new stadium in Kochi, pending shareholding approvals, and reduction in IPL matches. 

Arbitration Proceedings: 

• Both KCPL and RSW initiated arbitration proceedings in 2012 challenging the wrongful termination. 
• On 22nd June 2015 the arbitrator awarded Rs 384.83 crore to KCPL with 18% interest from termination date till award date. 
• Simultaneously, RSW was awarded Rs 153.34 crore with similar interest provisions totaling Rs 538.17 crore in combined awards. 

What are the Court Observations? 

• Limited Judicial Intervention: 
  • The Court emphasized that its jurisdiction under Section 34 of the Arbitration Act is very limited and cannot function as an appellate authority over the arbitrator's findings. 
  • Justice Chagla stated: "BCCI's dissatisfaction as to the findings rendered in respect of the evidence and/or the merits cannot be a ground to assail the Award." 
  • The Court rejected BCCI's attempt to delve into the merits of the dispute, stating it was contrary to the scope of Section 34 of the grounds. 
• Waiver of Contractual Requirements: 
  • The Court found that BCCI had effectively waived the bank guarantee requirement through its conduct and continued engagement with KCPL. 
  • The arbitrator's conclusion that BCCI waived the requirement under Clause 8.4 for bank guarantee furnishment was upheld as being based on material facts and documents. 
  • The Court noted that BCCI's acceptance of payments and continued negotiations demonstrated waiver of strict compliance timelines. 
• Repudiatory Breach Finding: 
  • The Court upheld the arbitrator's conclusion that BCCI's termination constituted a repudiatory breach of contract. 
  • The termination was found to be disproportionate and unjustified given the circumstances and BCCI's prior conduct. 
  • The Court noted that even if alternative views were possible, this would not warrant interference with the arbitral award. 

What are the Key Legal Principles Established? 

• Arbitral Award Sanctity: 
  • The judgment reinforces the principle that courts should exercise restraint in interfering with arbitral awards.  
  • The Bombay High Court clearly delineated the boundaries of judicial review, emphasizing that dissatisfaction with arbitral findings on evidence or merits cannot constitute valid grounds for setting aside awards.  
  • This position strengthens the arbitration framework by ensuring finality and reducing frivolous challenges to arbitral decisions. 
• Contractual Waiver Through Conduct: 
  • The Court's recognition of BCCI's waiver through conduct establishes an important precedent regarding contractual compliance.  
  • Despite explicit contractual deadlines, the judgment demonstrates that parties can waive strict performance requirements through their actions, acceptance of benefits, and continued engagement.  
  • This principle provides guidance for future commercial disputes where parties deviate from original contractual timelines while maintaining business relationships. 

What is Section 34 of the Arbitration and Conciliation Act, 1996? 

• Exclusive Remedy and Limited Grounds: 
  • Recourse to a Court against an arbitral award may be made only by an application for setting aside, and such award may be set aside only on specific statutory grounds including party incapacity, invalid arbitration agreement, procedural violations, jurisdictional excess, or conflict with public policy of India. 
• Public Policy Exception - Clarified Scope: 
  • An arbitral award is in conflict with the public policy of India only if the making of the award was induced by fraud or corruption, violates fundamental policy of Indian law, or conflicts with the most basic notions of morality or justice, but this test shall not entail a review on the merits of the dispute. 
• Patent Illegality Ground (Domestic Arbitrations): 
  • For domestic arbitrations (non-international commercial arbitrations), an arbitral award may also be set aside if it is vitiated by patent illegality appearing on the face of the award, provided that an award shall not be set aside merely on the ground of erroneous application of law or reappreciation of evidence. 
• Strict Time Limitation: 
  • An application for setting aside must be made within three months from the date of receipt of the arbitral award, with a possible extension of thirty days if the Court is satisfied that the applicant was prevented by sufficient cause, but not thereafter. 
• Prior Notice Requirement and Expeditious Disposal: 
  • An application under Section 34 shall be filed only after issuing prior notice to the other party with an affidavit endorsing compliance, and such application must be disposed of expeditiously within one year from the date of service of notice. 
• Court's Power to Adjourn for Tribunal Action: 
  • Upon receipt of an application, the Court may adjourn proceedings for a determined period to give the arbitral tribunal an opportunity to resume proceedings or take action that would eliminate the grounds for setting aside the arbitral award. 

Conclusion 

The Bombay High Court's decision represents a landmark ruling in sports law and arbitration jurisprudence, upholding arbitral awards worth over Rs 538 crore against BCCI's challenge. The judgment reinforces the limited scope of judicial intervention in arbitration matters while establishing important precedents regarding contractual waiver through conduct. This decision strengthens the arbitration framework in India and provides crucial guidance for future sports franchising disputes, emphasizing the importance of consistent contractual behavior and the finality of arbitral proceedings.