Home > companies > news > Bombay HC reserves verdict in BCCI-Deccan Chronicle row

Mumbai: The Bombay high court on Wednesday reserved its ruling in the case between Deccan Chronicle Holdings Ltd (DCHL), owner of Indian Premier League (IPL) Hyderabad franchise Deccan Chargers, and the Board of Control for Cricket in India (BCCI), after telling them to settle their dispute through arbitration.

Retired judge C.K Thakkar has been appointed arbitrator. DCHL will furnish an unconditional bank guarantee of 100 crore within 10 days from Wednesday.

Judge S.J. Kathawala of the high court has ordered that the case be resolved within three months. The court has stayed the team’s termination. The team’s termination notice will be confirmed if DCHL fails to provide the bank gaurantee at the end of the 10-day deadline.

The court is hearing an appeal filed by DCHL on 15 September challenging the termination of the Deccan Chargers franchise by BCCI. The board has questioned how the debt-laden team owner would be able to find the 150 crore needed to finance it in the sixth edition of IPL next year.

“The judge has been very fair to us and the termination of the team has been stayed for now," said Zal T. Andhyarujina, a lawyer for DCHL.

It isn’t the first time BCCI is taking the arbitration route with an IPL team. In 2010, two IPL teams, Kings XI Punjab and Rajasthan Royals, took disputes with the BCCI over their IPL terminations to arbitrators after challenging the board’s decisions in the Bombay high court. Both teams participated in IPL’s 2011 and 2012 editions. Their issues remain unresolved.

“The difference in our team’s arbitration and Deccan Chargers is that we have the financial stability while the promoters of the Hyderabad team is under financial strain," an executive from the Mohali IPL franchise Kings XI Punjab said on condition of anonymity.

The contracts of Kings XI Punjab and Rajasthan Royals were terminated on grounds their source of funding wasn’t clear, raising doubts over the ownership patterns of the two teams.

In a separate case, BCCI in 2011 terminated the contract of the Kochi franchise, saying the team owners had breached the terms of its agreement with the board.

The concern for BCCI and IPL stakeholders is that if the Deccan Chargers issue is not resolved, the league will have only eight participating teams, which would pare revenue earned from the league. In anticipation, BCCI, soon after announcing the termination of the Hyderabad team, said it will call for fresh bids from 10 cities to be a part of IPL in 2013. However, the high court on 17 September put a stay on fresh bids.

The board terminated the Deccan Chargers franchise after DCHL on 13 September turned down the only bid the team received in an auction—a 900 crore offer by real-estate firm PVP Ventures Ltd—on grounds the price and payment terms weren’t acceptable to it.

DCHL won the IPL franchise rights in 2008 for $107 million. With “over 4,000 crore" in debt, according to a court document, the company is battling a financial crisis that analysts have blamed on over-diversification into areas unrelated to its core newspaper publishing business. The Hyderabad-based firm has ventured into areas such as aviation and book retail besides investing in Deccan Chargers.

A consortium of lenders has expressed financial support to Deccan Chargers for its participation in the next season of IPL, Mint reported on 19 September.

DCHL, publisher of the Deccan Chronicle, Financial Chronicle and Asian Age newspapers, competes with HT Media Ltd, which publishes Hindustan Times and Mint, in some markets.

Shares of DCHL fell 3.5% to 9.98 at the close of trading on BSE on a day the benchmark Sensex dropped 0.3% to 18,632.17 points.

khushboo.n@livemint.com

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