PCB's case against BCCI dismissed by ICC dispute panel

The PCB's attempts to claim damages worth USD 63 million from the BCCI have met with what is now a final failure: the ICC's Dispute Resolution Committee (DRC) rejected the PCB's claim that the BCCI's failure to honour an agreement to play bilateral series in 2014 and 2015 was a legal breach.

The three-person DRC said the claim "must fail" because the agreement signed between the boards carried a "moral obligation" but not a legal one.

That will not be the PCB's only defeat. As is the norm in arbitration cases such as this, the party that loses the case usually ends up paying the costs for the proceedings, and the BCCI confirmed that it would seek legal costs from the PCB. "After hearing the evidence and arguments of the parties over three days in Dubai, the Dispute Panel by its award published today has rejected all of the PCB's contentions and accepted the BCCI's case inter alia on the ground that the BCCI Letter was non-binding and merely expressed an intention to play," the BCCI said in a statement. "The BCCI wholeheartedly welcomes the decision of the Dispute Panel. The BCCI will now move the Dispute Panel to recover its legal cost from the PCB."

In a brief initial response, the PCB said it noted the DRC decision with "regret" and "disappointment." The PCB also said it would "determine its future course of action" after consultations with its members, but the ICC made it clear that the DRC's judgement was "binding and non-appealable".

The panel, comprising Michael Beloff, Jan Paulsson and Dr Annabelle Bennett, conducted hearings between October 1-3 with several officials from both boards as well as senior ICC officials attending. The central question the DRC had to consider was whether the BCCI had indeed breached the agreement to play seven bilateral series between 2014 and 2023. Two of those "designated" tours were to be home series hosted by Pakistan scheduled for November 2014 and December 2015, both of which did not take place, and for which the PCB claimed damages.

Ultimately, the case hinged on how the DRC viewed the agreement the two boards signed on April 9, 2014 - an agreement, incidentally, signed in the chaotic days of the Big Three governance reforms. The PCB's contention was that it was legally binding, an argument which, at various points in its 26-page judgment, the DRC appeared to think was sustainable; the BCCI argued that it was not and that it was only one step in a process that would lead to bilateral tours.

That letter was signed by Sanjay Patel, then BCCI secretary, and Najam Sethi, who was the PCB chairman in 2014. That draft agreement was a result of PCB's conditional support of Big Three governance changes (the Big-Three model was eventually reversed by the ICC).

The DRC quickly concluded that both boards were at "cross purposes". The BCCI said the agreement was the first step which involved boards proposing dates, followed by a second step where member boards agreed to an FTP schedule for the commercial cycle 2015-23, and a final step involving member boards entering into bilateral FTP agreements in accordance with that schedule.

The PCB, however, considered the April letter to be, "in itself", legally binding, and "any subsequent FTP Agreement to be no more than a formality, 'a routine matter', as Mr Sethi for the PCB put it in his oral evidence."

However, it would not have helped the PCB's case that they sent the BCCI a draft long-form FTP agreement in June 2014, which was never signed, but which could imply that the PCB itself recognised the need for further steps after the April letter. And in an internal PCB board meeting, members were told that an MoU had been agreed but that a "legally binding agreement will subsequently be signed" - the implication again that the April agreement was not so.

The DRC rejected the PCB's claim that the April letter was a "quid pro quo" for its support to the Big Three's attempts to overhaul the ICC's governance and financial structures. The DRC pointed out that it was not the BCCI, but in fact, Cricket Australia and the ECB that had told the PCB they would not sign FTP agreements if the PCB did not agree to the Big Three model.

But the complexities of the matter were apparent in the judgment, with the DRC rejecting the BCCI argument that the April letter was "uncertain and incomplete" and "therefore could not be contractually binding." It was "a difficult argument to sustain (and one which the Panel rejects) for various reasons including BCCI approving bilateral tours without FTP agreements."

Their conclusion, eventually, fell against the PCB's claims on a line of argument raised by the current ICC chairman, Shashank Manohar. The April 9 agreement, according to the DRC, was at most a "letter of intent". If seen through a "microscope" the DRC said the PCB argument that the letter was a binding agreement "burns bright." But if a "telescope is deployed", and a broader take is considered, the argument is "extinguished."

"In the Panel's view, the reasonable observer apprised of all the facts would conclude that the April Letter was no more than a declaration of intent, albeit an intent sincerely held by the BCCI (and of course by the PCB) at most, as Mr [Shashank] Manohar (President of the BCCI from October 2015 to May 2016) put it, creating a "moral obligation" but not a legal one. Context trumps text."