Board Of Control For Cricket In India vs World Sports Group(I) P.Ltd

Board of Control for Cricket in India ... Appellant

Vs.

World Sports Group (I) P.Ltd. ... Respondent

O R D E R

Leave granted.

2. An 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28.6.2010, the BCCI rescinded the said agreement dated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.

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3. Aggrieved 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.

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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.

4. On 8.3.2011, BCCI invited tenders for grant of

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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 &

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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.

5. In 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.

6. When 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.

7. In view of the above, this appeal is disposed of

with the following directions:

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(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.

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(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.

8. Nothing 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.

9. The 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.

10. Parties to bear their respective costs.

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....................J. ( R.V. RAVEENDRAN )

New Delhi; ....................J. April 21, 2011. ( A.K. PATNAIK )