ZEEL Vs BCCI - Breach of Contract Ruling OF Court
Arjun Chaudhuri
Competition, in Sports Economics AND Marketing, is conditions
that are present in Advertising AND Promotions [A&P] Markets where A&P buyers
and sellers of Time AND Space interact to establish prices and exchange the services
of broadcasting International AND League Cricket. The principle objective of
any regulator OR court is to ensure that the self-interest of buyers and
sellers acts to serve the needs of the viewing consumer as well as those of the
individual market participants, without one to the unfair detriment of the
other, such as Zee Entertainment Enterprises Limited [ZEEL] [Arbitration
Awardee against BCCI] OR ESPN Star Sports [BCCI Awardee of Media Rights 2012],
as broadcasters, OR League Rights holders such as the BCCI who are accused of
using their dominant position as Sports Federations to create monopolistic
business practices to make unfair profits.
Case in point is the recent decision of the Arbitral Tribunal against
the Board of Control for Cricket in India [BCCI] who have held that the
BCCI is civilly liable for BREACH OF CONTRACT on the grounds of
"exploiting its dominant position" in governing League Cricket in
India AND "unfair conduct" towards the business interests of Zee
Entertainment Enterprises Limited [ZEEL] in the organizing of the Indian
Cricket League [ICL]. The Panel of Jurists observed in its Award that "we
are of the view that breach of agreement dated 12.04.2006 was committed by BCCI
and not by the Claimant". Further, "It appears from the material on
the record that BCCI took the action of termination of claimants rights under
agreement dated 12.4.2006 on account of claimant launching of ICL and not for
reasons made out in its letter of termination". The award further goes on
to state, "To us it seems that BCCI was exploiting its dominating position
in respect of game of cricket in India." The Arbitral Tribunal consisting of
eminent Jurists, namely, Justice AS
Anand [retired], former Chief Justice of India; Justice YK Sabharwal [retired],
former Chief Justice of India and Justice BN Srikrishna [retired], former
judge, Supreme Court of India AWARDED Zee Entertainment Enterprises Limited
[ZEEL] Rs. 1.4 billion in DAMAGES for loss of goodwill, loss of profit and also
refund of security deposit [Rs. 300 million] with interest that is to be paid
by 1st of December 2012 failing which the Award amount would carry
interest at 11% per annum w.e.f 31st of May 2007. The tribunal also
ruled that the blacklisting of ZEEL [and its group/affiliate companies] from
participating in any bidding process of BCCI was "clearly illegal".
The commercial dispute
pertains to an Agreement executed in April 2006 between BCCI and ZEEL, and its
subsequent termination, in which the broadcasting company was granted the
exclusive media rights to telecast all ODIs to be held between India and any
other country in any neutral territory outside India for a period of 5 years.
The BCCI terminated the Telecast Agreement in May 2007 at around the time when
the Indian Cricket League [ICL] was launched by the Essel Group, resulting in
ZEEL invoking the arbitration clause in the Agreement for "wrongful"
termination. The termination of the said agreement by the BCCI after the series
held in Abu Dhabi, UAE, and the tri-series held in Malaysia was termed by the
Arbitral Tribunal as "clearly illegal and invalid".
While BCCI reserves the right of appeal in this case, it provides the
opportunity to have the involved legal question given more deliberate and
careful study by the Appellate Courts, the final judgment in this case will be cited
as precedents in future cases AND landmarked as a standard of conduct for
Sports Federations in India, just as the current IOA elections are mandated by
the High Court to be.
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