SC rejects Nimbus plea against BCCI

Written by Indu Bhan | Indu Bhan | New Delhi | Updated: Apr 6 2012, 09:28am hrs
Nimbus Communications will have to furnish a bank guarantee of R305 crore to the Board of Control for Cricket in India (BCCI) in a dispute over the termination of the R1,600-crore contract, following the Supreme Court dismissing the channel's plea.

Nimbus had sought quashing of the the Bombay High Court's order that asked it to furnish the bank guarantee. The high court had, on February 27, directed Nimbus, which owns sports channels Neo Sports and Neo Cricket, to furnish security by way of a bank guarantee within two weeks pending hearing of its dispute.

An SC bench headed by Justice Altamas Kabir rejected the Nimbus' plea, saying that it was "not inclined to entertain the special leave petition, which is directed against an ad-interim order passed in a proceeding under Section 9 of the Arbitration and Conciliation Act, 1996, and the Notice of Motion, is still pending disposal".

It further asked the single judge of the HC to dispose of the matter "at the earliest and preferably within four weeks from the date of communication of this order."

According to Nimbus, the HC was not right in directing it to furnish security in the form of a bank guarantee for the entire claim amount, notwithstanding that the channel was a solvent company with an annual turnover of around R488 crore.

Stating that BCCI's claim for damages at the rate of R31.5 crore per game played by the Indian team was unreasonable, Nimbus said the sports body had not only wrongfully terminated the contract but also breached its duties and obligations.

"The claim of the respondent (BCCI) calculated on such basis is lopsided for the reason that such a figure is merely an accounting number and payable if the contract ran for its full five year term," it said.

BCCI alleged that Nimbus had defaulted in paying its dues it and had made "a feeble attempt to not pay and not comply with the contractual agreement."