An arbitral tribunal has ruled that the Board of Control for Cricket in India (BCCI) will have to pay around Rs 140 crore as damages to Zee Entertainment Enterprises (Zee) after BCCI in 2007 terminated its five-year contract with the channel for telecast rights of India's cricket matches played abroad.
The tribunal, comprising former Chief Justices of India AS Anand and YK Sabharwal, and former Supreme Court judge BN Srikrishna, held the BCCI guilty of "exploiting its dominant position" in cricket in India. The tribunal also held that Zee was treated unfairly in its commercial contracts, due to the launch of the Indian Cricket League and was illegally blacklisted.
The award was passed in favour of Zee, holding that BCCI was guilty of breaching its contract with Zee and that Zee was entitled to damages on all counts, including loss of goodwill, loss of profit and also refund of security deposit with interest. The tribunal passed an award of around R140 crore to be paid by BCCI to Zee by December 1, failing which the amount would carry interest at 11% per annum till payment.
“Zee welcomes the award handed over to it by an eminent panel of jurists. This award is towards recovery of the losses that we have incurred in the sports business in the past," said Punit Goenka, managing director & CEO, Zee.
The dispute pertains to an agreement in April 2006 between BCCI and Zee whereby Zee 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 five years. "This agreement was terminated illegally and invalidly by BCCI in May 2007, around the time of launch of the Indian Cricket League (ICL) by the Essel Group, resulting in Zee invoking arbitration for wrongful termination of the contract," Zee said in a media release.
The award amount payable by BCCI to Zee includes the security deposit of R30 crore with interest of 11% per annum from May 31, 2007, loss of profit and loss of goodwill. Zee shares were down 2.75% on the BSE on Friday to close at Rs 192.65.