The Pune Warriors franchise has been ousted from the Indian Premier League after the BCCI terminated, with immediate effect, its franchise agreement with Sahara Sport Adventures Ltd, a subsidiary of Sahara India Pariwar. The reason for the termination was non-payment of the bank guarantee. The decision was taken by the BCCI working committee in Chennai on Saturday. Responding to Pune Warriors' ouster, Sahara said this was not the first time the BCCI has treated the franchise "with disdain and in an unfair manner".*
According to a press release issued by BCCI secretary Sanjay Patel, Sahara were required to furnish a bank guarantee of Rs 170.2 crore for IPL 2014 in March this year. The franchise had defaulted on 70% of the payment last season and had its bank guarantee encashed by the BCCI in May.
The BCCI release stated that, in spite of five reminders from the board, Sahara officials had communicated the franchise's decision to not submit the bank guarantee until an arbitration into their demand of reduced franchise fees was completed. Both parties had agreed to initiate arbitration in 2012, but the process has not yet started due to their disagreement over the judges to be appointed.
"In order to proceed with the preparations for the 2014 season, it is important that BCCI now has certainty as to whether the Pune franchise will comply with the terms of its franchise agreement," Patel said. "Given Sahara's continued position that it would not deliver the bank guarantee, the Working Committee unanimously determined to terminate the Sahara franchise agreement, while taking whatever action was necessary to protect the BCCI position."
Pune Warriors is the third IPL franchise, after Kochi Tuskers Kerala and Deccan Chargers, to be ousted from the IPL. Since joining the IPL in 2011 by bidding $370m, Sahara had been demanding that the franchise fee from their original agreement be reduced since the minimum matches per year have been reduced from the 18 promised to them (the 2013 season had 16 league matches per team).
Responding the the BCCI's decision in a statement, Sahara said the BCCI had once again gone back on its promises: "This is not the only time that BCCI has treated Pune Warriors India with disdain and in an unfair manner ... [This comes] despite assurances given in a meeting between Mr Subrata Roy Sahara and Mr N Srinivasan, president, BCCI, in February 2012, subsequent to which a joint media statement was issued whereby both parties agreed to start the arbitration proceedings to address Sahara's claim for a reduction in franchise fee for 74 matches. However, in contravention of the understanding reached between the parties, no steps were taken by BCCI to address our long standing demand of the reduction of the franchise fee. In fact, far from starting the arbitration, BCCI has thwarted the process."
Patel's statement implied that all the legal hurdles had been cleared for Sahara's termination. "In August 2013 and pending arbitration, Sahara moved the Hon'ble Bombay High Court seeking an injunction on BCCI's right to terminate the franchise agreement as a result of Sahara's default in not delivering the bank guarantee," Patel said. "In its order of September 5, 2013, the High Court concluded that only if Sahara gave the bank guarantee as required by the Franchise Agreement could BCCI not terminate the agreement."
*14.30GMT, October 26: This article has been updated with Sahara's statement.