The termination of Deccan Chargers (DC), one of the initial eight teams of the Indian Premier League (IPL), may cost the Board of Control for Cricket in India (BCCI) Rs 4,800 crore after the court-appointed arbitrator passed an award in favour of the erstwhile owner of the franchise, Deccan Chronicle Holdings (DCHL).
The case dates back to 2012, when the Hyderabad-based media group had challenged the ‘alleged illegal termination’ of an IPL team franchisee by the BCCI.
The board had announced the termination of DC on September 15, 2012, following an emergency meeting of the league’s governing council.
DCHL, the then owners of the team, moved the Bombay High Court challenging the termination but the board initiated a new tender for the Hyderabad franchise, which was subsequently won by Kalanithi Maran-owned Sun TV Network.
The high court had appointed retired Supreme Court justice CK Thakkar as the sole arbitrator between the two parties eight years back.
On Friday, DCHL won the arbitration against the board.
The BCCI has been directed to pay a total of Rs 4,800, which includes various claims made by the DCHL, by September 2020.
BCCI is expected to challenge the decision in the Bombay high court.
The whole issue had started when the beleaguered media company DCHL failed to furnish a bank guarantee of Rs 100 crore from a nationalised bank to the BCCI.
Earlier, creditors of DCHL had reached out to the board seeking its help in recovering loans to the media company.
The result of arbitration has come at a time when the National Company Law Tribunal (NCLT) has already allowed a resolution plan for DCHL.
Last year, NCLT had approved the resolution plan submitted by Kolkata-based SREI Group’s SREI Multiple Asset Investment Trust Vision India Fund, which involved Rs 408.06 crore in cash, certain high-value assets and a share in Deccan Chargers to be distributed among 37 financial creditors against Rs 8,180 crore loans extended by them.
The operational creditors had further extended Rs 154.36 crore to the media house.
Earlier in 2017, a similar arbitration case was won by the owners of now terminated Kochi Tusker Kerala, wherein the BCCI was asked to pay Rs 850 crore.
The matter is still pending.
“However, in this case, the company (DCHL) is already under Corporate Insolvency Resolution Process (CIRP) and the lenders are acting fiduciaries. It will be difficult for the BCCI to deal with so many players,” said a senior lawyer.
DCHL had acquired the rights of the Hyderabad Franchise for $107 million in 2008 for a period of 10 years. While in the first year, the team was at the bottom of the league, making a strong come back under Adam Gilchrist, DC won the second edition of IPL, which was played in Hyderabad.