Bombay High Court Says Non-Signatory Mumbai Cricket Association Bound By Arbitration Clause In T20 Mumbai League Dispute

The Bombay High Court on Monday referred to arbitration a dispute over participation rights in the T20 Mumbai League between Jupicos Entertainment Pvt. Ltd. and league operator Probability Sports (India) Pvt. Ltd. The dispute relates to Jupicos' right to continue participating in the league through its team Shivaji Park Lions.

The Court held that the Mumbai Cricket Association (MCA), under whose aegis the league is conducted, is bound by the arbitration agreement even though it is not a signatory to the main Participation Agreement.

Holding that MCA had a decisive role in conducting the league and had participated in the performance and termination of the contract, the Single Bench of Justice Sandeep V. Marne ruled that MCA is a veritable party to the arbitration agreement and cannot be excluded from the arbitral proceedings.

The Court observed,

“MCA is fully, completely and absolutely involved in conduct of the League. Without its approvals, it is not permissible for any team to participate in the League. The PA cannot neither be performed nor can be terminated without the approval of MCA. If conduct of MCA relating to subject matter (League) is taken into consideration, there can be little doubt that MCA has directly dealt with the applicant, thereby exhibiting clear intention of being bound by PA read with Supplementary Agreement. In my view therefore, after applying the tests laid down by Constitution Bench in Cox and Kings Ltd (supra), there can be little doubt to the position that MCA is a veritable party to the arbitration agreement contained in the PA.”

Justice Marne accordingly appointed Justice Nitin Jamdar, former Chief Justice of the Kerala High Court, as the sole arbitrator to adjudicate disputes arising from the T20 Mumbai League participation agreement. The arbitral proceedings will be conducted in Mumbai.

The dispute concerns Jupicos' claim that it has a contractual right to participate in future editions of the T20 Mumbai League under the Participation Agreement, which it sought to enforce through specific performance of the Participation Agreement and the Supplementary Agreement.

A Participation Agreement dated March 9, 2018 granted Jupicos Entertainment the right to operate the cricket team Shivaji Park Lions, representing the Mumbai South Central territory in the T20 Mumbai League for five editions. The league was conceptualised by the Mumbai Cricket Association, while Probability Sports (India) Pvt. Ltd. was appointed as the league operator responsible for managing and conducting the tournament.

In April 2019, Jupicos, Probability Sports and the Mumbai Cricket Association entered into a Supplementary Agreement that revised the commercial and operational terms governing the league. The agreement dealt with issues such as minimum guaranteed revenue for the teams and the manner in which future editions of the tournament would be conducted. It also made clear that key decisions relating to the league would remain subject to MCA's final approval.

The relationship between the parties deteriorated after Probability Sports claimed that Jupicos had failed to pay participation fees of Rs 35.17 lakh. On 24 January 2020, it issued a notice terminating both the Participation Agreement and the Supplementary Agreement. Jupicos maintained that the outstanding amount was later paid, but alleged that it was nevertheless kept out of discussions concerning subsequent editions of the league, including meetings held by MCA with other franchise owners.

When attempts to resolve the dispute did not succeed, Jupicos invoked the arbitration clause contained in Clause 11 of the Participation Agreement dated 9 March 2018. It then moved the High Court under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator and asking that MCA also be made part of the arbitral proceedings.

According to Jupicos, MCA exercised ultimate control over the conduct of the league and the Participation Agreement could not be viewed in isolation from the Supplementary Agreement. It argued that the two documents formed part of a single composite arrangement, and that MCA, though not a signatory to the Participation Agreement, was still bound by the arbitration clause. MCA resisted the application, saying it had not signed the Participation Agreement and had only joined the Supplementary Agreement as a confirming party. Probability Sports, for its part, objected on the ground of limitation, contending that the cause of action arose on 24 January 2020 when the termination notice was issued.

After examining the contractual framework, the Court noted that MCA was not a mere outsider to the arrangement. It had played a role in the execution and performance of the Participation Agreement and had also signed the Supplementary Agreement, which altered and supplemented the original terms. In the Court's view, the two agreements were part of a composite transaction, and MCA's involvement reflected an intention to be bound by the overall contractual structure governing the league.

Referring to the Supreme Court's decision in Cox & Kings Ltd. v. SAP India Pvt. Ltd., the Court reiterated that a non signatory can be compelled to arbitrate where the agreements form part of a single commercial arrangement and the non signatory has been directly involved in its performance.

As for the objection that the claim was time barred, the Court declined to decide the issue at the referral stage and left it to the arbitral tribunal to consider.

The dispute was therefore referred to arbitration.

For Applicant (Jupicos Entertainment Private Limited): Advocates Prahlad Paranjpe, Vikramjit Garewal, Shweta More, Rupa Shaw instructed by Atishay Jain.

For Respondent no.1 (Probability Sports (India) Private Limited): Advocates Devesh Juvekar, Mithilesh Chalke, Shivangi Goel instructed by Rajani Associates.

For Respondent no.2 (Mumbai Cricket Association): Advocates Rashmin Khandekar, Pranav Nair, Swati Sawant, Milind Spose, Utkarsh Pawar instructed by S.K. Legal Associates LLP.