Tribunal upholds Zee appeal against BCCI termination of 2006 contract

A three-member tribunal looking into Zee Entertainment Enterprises Limited’s (ZEEL) allegation of wrongful termination of a contract by BCCI in 2007 has ruled in favour of the broadcaster.

The dispute pertains to termination of an agreement executed in April 2006 between BCCI and ZEEL, through which ZEEL was granted exclusive media rights to telecast all ODIs involving the Indian team played in any neutral territory outside India for a period of five years. BCCI terminated the agreement in May 2007.

According to a ZEEL statement, the broadcaster alleged that the agreement ‘was terminated illegally and invalidly by BCCI in 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’.

The tribunal observed, “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.”

According to a ZEEL statement, the tribunal passed an award of approximately Rs 140 crores to be paid by BCCI by 1 December 2012, which includes a security deposit of Rs 30 crores with interest from May 2007, when the contract was terminated.

Punit Goenka, managing director and chief executive officer, ZEEL, said, “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.”

The tribunal consisted of former Chief Justices of India AS Anand and YK Sabharwal, and former Supreme  Court of India judge BN Srikrishna.