Deepali Kalia –
Bombay High Court set aside the arbitration award against the Board of Control for Cricket in India (BCCI) over it terminating Deccan Chargers from Indian Premier League (IPL) and stated that an Arbitral Tribunal cannot apply public law principles on fairness and reasonableness.
The Arbitrator (retired Supreme Court judge, Jusctice CK Thakker) applied public law principles to hold BCCI accountable and stated that the body had discriminated against Deccan Chargers.
It was held by the Arbitrator that since BCCI was performing public functions despite it not being a State under Article 12 of the Constitution, it had the public law duty to act fairly.
High Court Bench comprising of Justice Gautam Patel stated that it was irrelevant whether BCCI was a ‘State’ or not or whether it was performing ‘public functions’, as in a private contract public law duty cannot be enforced.
“The public law duty to act fairly cannot be imported into a contract by a private law arbitral tribunal to effectively alter its terms so as to create an obligation on the so-called public-duty party that the contract does not envisage.”, noted the High Court.
“A writ court may well hold against a public body on a public law principle or by invoking Article 14; but an arbitrator, constrained as he or she is by the contract, has no such power.”, Justice Patel stated.
Private law bound tribunals cannot hold a public body accountable on the principles under Article 14 of the Constitution, added Justice Patel.