Court rules against Volleyball Federation of India's challenge to arbitration award favoring Baseline Ventures.
In a significant ruling, the Madras High Court has upheld an arbitration award in favor of Baseline Ventures (India) Pvt. Ltd. against the Volleyball Federation of India (VFI). The dispute, which centered around the termination of a contract for the organization of a pro-volleyball league, was resolved with the High Court dismissing VFI's petition seeking to overturn the arbitrator's decision.
The case arose from an agreement dated February 21, 2018, between the VFI and Baseline Ventures, wherein Baseline was to conduct ten seasons of a pro-volleyball league over a period of ten years. The relationship soured after VFI alleged breaches of contract by Baseline, including manipulation of accounts, registration of trademarks without approval, and failure to conduct certain league events.
The arbitration award, delivered on November 21, 2020, found that the termination of the contract by VFI was unjustified and awarded Baseline Ventures a sum of Rs. 4 Crores for loss of profits, along with other reliefs. The arbitrator dismissed VFI's counterclaims, including demands for damages due to loss of reputation and manipulation of accounts by Baseline.
Justice N. Anand Venkatesh, presiding over the case, emphasized that the arbitration award did not suffer from any perversity or patent illegality. The judge highlighted that the arbitrator's findings were based on a plausible interpretation of the agreement and the evidence presented.
The court noted that VFI's arguments regarding breaches of contract, such as the failure to conduct the league in 2018 and alleged manipulation of accounts, did not hold merit. The arbitrator had concluded that the non-conduct of the league in 2018 was not a breach, as the contractual terms did not specifically mandate that the league must commence in that year.
Furthermore, the court upheld the arbitrator's decision that Baseline was not guilty of account manipulation, as the discrepancies noted did not amount to manipulation and there was a need for a third-party audit, which was not pursued by VFI.
The High Court's decision reaffirms the principle that arbitration awards can only be set aside under Section 34 of the Arbitration and Conciliation Act, 1996 if they are found to be perverse or patently illegal, neither of which were applicable in this case. The petition filed by VFI was dismissed with costs of Rs. 2,50,000 awarded to Baseline Ventures.
Bottom Line:
Arbitration award cannot be interfered with under Section 34 of the Arbitration and Conciliation Act, 1996 unless it suffers from perversity or patent illegality.
Statutory provision(s):
Arbitration and Conciliation Act, 1996 Section 34
