New Delhi: A few months after its surprising win in the inaugural edition of the Indian Premier League Twenty20 championship, Rajasthan Royals has parted ways with its main sponsor, Bajaj Allianz Life Insurance Co. Ltd and signed on a new one, Tata AIG Life Insurance Co. Ltd.
The 2008 IPL champion has not only terminated its three-year sponsorship deal with the insurance company, but also filed a suit against Bajaj alleging that the company violated the original agreement between the two and hasn’t paid up.
Different strokes: A file picture of Rajasthan Royals’ Graeme Smith and Swapnil during an IPL T20 match.
Both sides refused to divulge details of the case, claiming it was before the court, but according to information available on the Delhi high court website, Jaipur IPL Cricket Pvt. Ltd, the company that owns Rajasthan Royals, has filed a suit against Bajaj Allianz for “permanent injunction, recovery of dues and damages on the basis of memorandum of understanding” signed between them on 31 March 2008.
The IPL champion has also sought to recover at least Rs5.25 crore from the company as dues. In its petition, it said “out of the payment due, the defendants paid only Rs3.75 crore, while Rs5.25 crore is due and payable to the plaintiff since 8 June 2008”.
The sponsorship deal, according to the petition, was cancelled on 1 December. Rajasthan Royals, meanwhile, signed Bajaj Allianz’s rival Tata-AIG as its main sponsor for next year’s Champions League. A Tata-AIG spokesperson confirmed the deal and said both parties would consider extending the partnership.
Mint couldn’t independently ascertain the reasons for the break-up but, according to a senior executive of Bajaj Allianz, the cricket team wanted a higher fee after it won the first edition of the IPL. “When we signed up, it was a team that did not exactly have any star attractions but we supported them and gave them a fixed fee and a large performance bonus,” the executive added. “The contract also said that if the team qualified for the semis (semi-finals), we would increase the contract for the full term and increase the fixed fee, and we did exactly that. We fulfilled our commitment. But now, they are saying they don’t want to be associated with us.” The executive didn’t wish to be identified because the case is before the court.
According to the information on the suit on the court’s website, the sponsorship deal allowed Bajaj Allianz to use the Rajasthan Royals brand in its advertising. On 29 November, the company sent a mail to the IPL champion saying it was releasing a new television commercial, on 30 November, using the Rajasthan Royals brand name. In response, Rajasthan Royals asked the insurer to withhold the ad and terminated the deal on 1 December.
“This is their side of the story. Our story has yet to be heard,” said the Bajaj Allianz official.
Raghu Iyer, chief marketing officer of Rajasthan Royals, and the team’s lawyer Anish Dayal declined comment.
The case will come up for hearing on 7 January.