Bombay High Court rules against BCCI in the IPL media rights issue
India Today
The Bombay High Court quashed and set aside an arbitral award which upheld rescission of media rights by the Board of Control for Cricket in India (BCCI) to World Sport Group (India) Pvt. Ltd. in relation to the Indian Premier League (IPL) for all territories other than Indian sub-continent.
"Due to the third wave of the COVID-19 pandemic and also other exigencies of work, there was a delay in pronouncing judgment," said justice BP Colabawala before quashing and setting aside an arbitral award which upheld rescission of media rights by the Board of Control for Cricket in India (BCCI) to World Sport Group (India) Pvt. Ltd. in relation to the Indian Premier League (IPL) for all territories other than Indian sub-continent.
Justice Colabawala had extensively heard the issue in 2021 and reserved it on 18 March 2021. The entire issue pertained to a tender issued by BCCI in 2007 for a period of 10 years starting from 2008 to 2017 regarding media rights for IPL. WSGI was the successful tenderor which was awarded the global media rights of IPL for approximately one billion USD.
Since WSGI was not a broadcaster but only a trader in Media Rights, it entered into pre-bid negotiations with MSM which had a broadcasting network in India.
During these negotiations, MSM, for its own commercial reasons, instead of entering into a sub-licensing Agreement with WSGI, desired to enter into a direct Media Rights License Agreement [MRLA] with BCCI for India rights till 2012 for USD 275.40 Million. Another MRLA was executed between BCCI and WSGI for India rights for a sum of $550 million and a 'rest of world' rights for $92 million till 2017.
However, after the first IPL happened to be a resounding success, on March 14 2009, BCCI terminated MRLA with MSM after which the India rights of IPL were reverted back to BCCI. The Board wanted to re-auction/re-sell the India Rights for the IPL for the entire period of 2009-2017 for a higher License Fee.
In light of this, BCCI at the outset entered into a Deed of Mutually Agreed Termination (DMAT) with WSGI in 2009. With this agreement, the composite MRLAs entered into by BCCI with WSGI came to be terminated. According to WSGI, it agreed to a mutual termination of the first MRLA only to enable BCCI to receive an enhanced License Fee for the India Rights for the period 2009-2017 on the condition that the India Rights for the period 2009-2017 would be licensed to WSGI, or its nominee - WSGM, thereby enabling WSGI to realize a premium for relinquishment of its India Rights for the period 2013-2017. The other condition that was laid down was that BCCI would reinstate WSGI's RoW Rights for the period 2009-2017 by entering into a fresh MRLA with WSGI on the same terms and conditions as was recorded in the first BCCI-WSGI MRLA.
BCCI later alleged that all agreements of 2009 including the DMAT formed part of a fraudulent composite transaction which gave them the right to terminate the second MRLA with WSGI. BCCI alleged that all the agreements were executed only for the purpose of diverting funds to WSGM, a sister concern with WSGI, which showed that both companies were complicit. The fraud alleged by BCCI was that the monies under the facilitation deed were actually due to BCCI and since WSGI companies had indulged in fraud, BCCI was entitled to rescind the MRLA for RoW rights.