BCCI's termination of Zee's broadcast rights illegal: Tribunal

MUMBAI: A three-member Arbitral Tribunal has held the BCCI guilty of "exploiting its dominant position" for arbitrarily terminating its five year broadcast rights contract with Zee Entertainment Enterprises Limited (Zeel).

The Tribunal comprising Justice A.S. Anand (Retd.), Former Chief Justice of India Justice Y.K. Sabharwal (Retd.), and Former Chief Justice of India and Justice B.N. Srikrishna (Retd.), Former Judge, Supreme Court of India, 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 amount of approximately Rs 1.4 billion payable by BCCI to Zee includes the security deposit of Rs 300 million with interest at 11 per annum from 31 May, 2007, loss of profit and goodwill. The Tribunal also observed that the BCCI blacklisting of Zee (and its group/affiliate companies) from participating in any bidding process of BCCI was ?clearly illegal?.

The Award was passed in favour of Zeel 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.

Zeel MD Punit Goenka commented, ?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. We continue to remain committed to our sports business in the long term.?

This dispute pertains to an agreement executed 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.

According to Zee, this agreement was terminated illegally and invalidly by BCCI in May 2007 around the time of launch of the ICL by the Essel Group resulting in Zee invoking arbitration for wrongful termination of the contract.

The termination of the agreement by BCCI after the series held in Abu Dhabi and the tri-series held in Malaysia was termed by the Tribunal as ?clearly illegal and invalid?.

The Tribunal said: ?We are of the view that breach of agreement dated 12.04.2006 was committed by BCCI and not by the Claimant? while making the award in favour of Zee. 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. To us it seems that BCCI was exploiting its dominating position in respect of game of cricket in India."