HC orders appointment of arbitrator in WSG-BCCI dispute

Mumbai: Observing that World Sports Group (WSG) had not committed fraud at the time of entering into a contract with BCCI, the Bombay High Court on Wednesday directed appointment of an arbitrator to decide the Mauritius-based company`s case challenging termination of its agreement by the cricket board.

A division bench of Justices P B Majmudar and Amjad Sayed was hearing an appeal filed by WSG against a single bench order dismissing its plea against BCCI`s decision to terminate contract between them.

"Prima facie, WSG had not committed fraud upon BCCI in connection with the agreements. The contracts were in fact brought to the notice of all the members of the board," the judgment said.

The bench directed appointment of an arbitrator within a month to hear and finally decide the case. "Till the arbitrator is appointed, BCCI is restrained from giving the contract to anyone. The board has also made a statement that they will not create any third party rights till then," the order said.

The court observed, "Simply because the person (Lalit Modi) who was the signatory to the contract is replaced or removed it would not be proper to terminate all the contracts signed by the earlier chairman or commissioner of IPL."

WSG and BCCI had entered into an agreement in March 2008 wherein WSG was awarded world rights for one billion US dollars to telecast Indian Premiere League (IPL) matches for the period of 2008 to 2017 and telecast rights for the Indian sub-continent for the period of 2013 to 2017.

The board had entered into a separate agreement with Sony Entertainment Television (SET), owned by Multi Screen Media (MSM) Satellite for telecast rights in India for the period of 2008 to 2012.

However, BCCI, in March 2009, terminated the contract with WSG on the grounds that there had been a breach and WSG had committed fraud.

According to WSG`s petition, MSM had agreed to pay them Rs 450 crore as facilitation fee (consideration) to enable WSG to relinquish their telecast rights for India.

Unless WSG relinquished these rights, SET could not have entered into direct agreement with Cricket Board over telecast of rights.

WSG`s lawyer Aspi Chinoy argued that BCCI had terminated the contract between them on the ground that WSG had misrepresented to MSM by not disclosing another agreement dated March 23, 2008 between them and hence committed a fraud.

There was in fact no agreement dated March 23, 2008, between the two sides and this date had been wrongly mentioned as a typographical error instead of March 15, 2008. There was only one agreement dated March 15, 2008 between WSG and BCCI, he submitted.

BCCI counsel Rafiq Dada argued that the facilitation fee, which had been paid to WSG, should have gone to them and not to WSG.