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Who is responsible for the present debacle
ICC SPONSORSHIP VS PLAYERS CONTRACT
LAW OR OUT LAW
By : N R KRISHNAN
Rajeshwari Nagar Bangalore
Phone 080-860 0150
The on going engagement or disengagement between The International Cricket Council (ICC) and The Board of Control for Cricket in India (BCCI) over the world cup 2003 sponsorship contract tends to raise many critical questions, which were latent, in regard to the conduct and administration of the game throughout the world. Not only questions of law Vis a Vis the contracts galore, but also the role ICC could legitimately claim as the apex body in regard to the game of cricket, the matter of administration of BCCI as a body and the public interest at large, are brought to the fore.
ICC
What is ICC’s constitution? Apparently it is an incorporated Body under the Laws of England. The respective Country’s Cricket Boards are its members. The objects for which ICC is incorporated must be governed by its charter known, as the Memorandum of Association(MOA). The Public in India, it could be assumed, will not be fully aware of the objects. Since it is a Public document, if the BCCI. which must be in possession of the MOA, enlightens the public of the ICC’S charter documents, it will enable the discerning public to appreciate the role ICC plays vis a vis Cricket. This body was formerly known as Imperial Cricket Conference and if I am not mistaken it underwent a name change to International Cricket Council.
The general understanding about such Apex Body is, that it lays down regulations for the conduct of the game, including stipulations on umpire, referee etc, provisions for propagation of the game, and guidelines for conducting Tournaments. A parallel body which comes to one’s mind is The International Olympics committee which has been conducting Olympics for so many years and the participating countries is nearly 15 to 20 times the number of world cup cricket playing countries. No “Contracts issue” of such a magnitude as the present one in cricket has come up in Olympics affairs where as, in cricket with the involvement of hardly a dozen countries in the world cup, the inaugural one being in 1975, serious issues have brought to the surface the anxiety and anguish, concern over the possibility of one Nation, which has unparalleled passion for the game, being disabled from participation in the world cup. Besides this general concern, the contracts issue, has brought to the center stage, the legal complexities involved.
If an ordinary person reads the ICC chief’s statement to the effect that ICC does not want anything more than what BCCI has committed to international cricket, he gets more confused. Against this background, the ICC’s objects vis a vis cricket as enshrined in its constitutional document is to be clearly understood by all well meaning public throughout the world. That is why the need to look at the ICC’S charter has arisen. One has to understand where the primacy lies “on cricket “ or “ the funds surrounding cricket”.
THE ISSUE:
As per ICC’S statement as reported in the media:
1. The Cricket events agreement was signed by the BCCI on 28th may 2001 and it is said to inter alia provide as follows.
“4.1 Member (i.e. BCCI) acknowledges that IDI’S obligations under the WSG/NC (World sport Group/New corporation) agreement go beyond ensuring the participation in events of the relevant ICC member and that such obligations extend to avoiding conflict between the commercial rights which are the subject of the WSG/NC agreement (and which WSG/NC will sub grant to official sponsors, suppliers and Broad casters in respect of the events) and with any other arrangements with the sponsors, suppliers, Broad casters or any other third parties in conjunction with host teams, venues and players or otherwise in connection with any of events.
I must admit my inability to understand the import of the clause, readily and with a little bit of effort, realized that this could be the clause dealing with the avoidance of conflict between official sponsors commercial rights and individual sponsor s rights.
Under this clause the BCCI acknowledges avoidance of conflicts of commercial rights.
According to ICC, this agreement was signed by BCCI without comment or query.
2. Then comes the Participating Nations Agreement (PNA), which was signed by BCCI on 13th March 2002. This Agreement is said to contain provisions for exclusive Sponsorship, the respective Boards to manage their Players, commitment from the Boards to send their Best Teams, reasons for non availability of players which seeks to exclude commercial reasons, commitment from the Board to get the Players Terms signed by each player and not only that but also each player has read and understood the provisions of this agreement. The full text of the agreement is not before us but certain operative parts as made available by ICC and reported in the media are as below:
Clause 5.1
The Competitor (i.e. the BCCI) will ensure that all Players in its squad and the Team selected for each Match are the Competitor’s best players available to the Competitor at the time of the Squad and Team selection respectively, accepting as reasons for non-availability of players only insurmountable and verifiable practical issues such as suspension, injury or serious and unavoidable non-commercial reasons such as bereavement of a close family member.
Clause 13.3
The Competitor hereby undertakes to co-operate and to procure the co-operation of all Squad members with IDI and GCC (as IDI may reasonably require) to avoid any conflict between the Commercial Rights and the interests of the Competitor and its Players, including but not limited to conflicts involving the rights or actions of any Team Sponsor or Player Sponsor. In the event of any such conflict arising the Competitor shall, upon becoming aware thereof, take all steps reasonably necessary to avoid or alleviate conflict so as to avoid any adverse effect to the value of the Commercial Rights.
Clause 13.4
The Competitor shall procure that each Player and Team Official provides (at no cost to IDI, UCBSA [i.e. the United Cricket Board of South Africa] or sub-licensees) authorization to enable IDI and UCBSA to use and to sub-license the use of his name, image, autograph, biography, photograph, likeness and other relevant details and to replicate (by electronic or by any other means) his image and any other performance rendered by him during the Event, including (where relevant) his batting and/or bowling action for the purposes of promoting the Event and exploiting the Commercial Rights (but excluding the Host’s Rights) provided that such name, image, autograph, biography, photograph, likeness other relevant details or performance shall not (without the prior written consent of the relevant Player or Team Official) be used in any manner which may reasonably be considered to constitute a personal endorsement by any such Player or Team Official of any product or service.
Clause 14.1
The Competitor shall procure that, without cost to IDI, each member of the Squad (including for the avoidance of doubt not only all of the Players but also the non-playing members of the Squad) shall have signed the Player Terms, the form of which is set out in Schedule 3, and that all of the signed Player Terms for the Squad (bearing the Squad members’ original signatures) are delivered to IDI by 14 January 2003. The Competitor shall procure that each potential member of the Squad (to the extent that the Competitor is reasonably able to predict the same) has been provided with a copy of and shall use its best endeavors to ensure that each Squad member has read and fully understood the provisions of this Agreement (including, without limitation, the Doping Regulations) as soon as practicable following the signature of this Agreement by the Competitor and, in any event, no later that prior to their signature of the Player Terms. The Competitor shall thereafter use its best endeavors to procure compliance by each member of the Squad with all the Player Terms and shall take all steps necessary to enforce the Player Terms as IDI or the Event Technical Committee may require.
This agreement is the bone of contention. ICC says that specific opportunity was given to BCCI to object any aspect of the PNA including the opportunity to make direct contact with the ICC’S solicitors. ICC further says that at no stage did the BCCI raise any issue with any aspect of the PNA nor take up the opportunity to discuss any concerns with the ICC or its solicitors. In the intervening period between 24th Dec 2001 when the PNA was forwarded to BCCI and the date of its return that is 13th march 2002 there was no correspondence between BCCI and ICC /IDI or its solicitors concerning the PNA, avers ICC.
ICC claims that under the agreement:
a) BCCI is committed to sending its best team to the world cup
b) The contract reinforces BCCI’S right and responsibility to manage its own players within the commitment it has taken under the PNA
c) BCCI has accepted the players terms put forward by ICC
d) BCCI has taken on the responsibility of ensuring that its players accepted the player’s terms that the Indian Board has agreed on their behalf.
This agreement has been signed by Mr. Niranjan Shah (former Hon Sec BCCI)
The BCCI has announced the Team for world Cup by the scheduled date of 31st dec 2002.By Jan 14 2003 all players in the squad will have to sign the players terms.
Since some of the players have individual contracts for commercial endorsements, the consideration running into a few million rupees and which contracts were entered into before 2002, some of the contracts may come into conflict with the world cup sponsors commercial rights. Obviously the Indian players involved are not in a position to sign the player’s terms. On the other hand BCCI has undertaken to get the players terms signed by the chosen players. That is how the problem has come up. Besides there are other covenants in favour of the world cup sponsors allowing usage of the players images etc for certain period before and after the duration of the world cup. This has added to the controversy. It is quite clear BCCI is not in a position to implement the terms of the agreement because of the players stand over their individual rights.
THE UNFORTUNATE PART of the whole episode is that the controversy between BCCI & ICC depicts the players in poor light. So one has to understand what the players have done.
PLAYERS ROLE / INDIVIDUAL COMMERCIAL SPONSORSHIP CONTRACTS
i) What they have done: Some of the players have given commercial endorsements for certain monetary consideration. Obviously the stakes are high.
ii) Since when : The contracts are in force before 2002
iii) Are the contracts in force now : Yes, they are subsisting
iv) Are the contracts Ethical : Yes, they are
v) Are they in conflict with any other person’s rights at the time of conclusion:
Definitely No, they never trampled upon any other persons rights
vi) Are they Legal : Yes, they are.
That being the case the players have done nothing in this controversy. On the contrary these contracts could well be defined as those in their ordinary pursuits of life. As against this background the ICC ‘s comment to the effect that the choice before players is money Vs honour falls under the category of “Avoidable”. One can’t help feeling that the players do not deserve this.
ICC/BCCI CONTRACTS
The world cup sponsorship contract will fetch to the ICC’s coffers US$550Million and this sum is intended by ICC for propagation of the game. To achieve this financial objective exclusivity has been awarded to sponsors in terms of which no player could give commercial endorsements, which are in conflict with the sponsor’s commercial rights. This restriction applies not only during the duration of the world cup but also for certain period before and after the duration of the world cup.
It is significant as matters stand today, the restrictions have an impact of enormous magnitude only on the Indian players. There are no other players involved from other countries to any appreciable degree, that is why the heat is very much in India
Let us address similar questions to those mentioned earlier to these contracts as well.
1) What they have done
ICC has entered into sponsorship contracts with certain sponsors for world cup 2003 the consideration for which is US$550Million
2) Since when : Recently concluded perhaps in 2002, date not known.
3) Are the contracts in force now: Yes.
4) Are the contracts ethical : questionable
5) Are they in conflict with any other person’s rights at the time of conclusion.: apparently in the light of the controversy generated now ,they seek to trample upon players existing individual contracts.
6) Are they Legal : questionable as evident from BCCI’s stand of putting ICC on notice in regard to arbitration.
COVENANTS.
Since the BCCI has put ICC on notice in regard to arbitration one should not jump to conclusion on the validity of the covenants more so when the full text is not available to the public. However with the instalment release of certain covenants, as reproduced earlier, by ICC some of the claims put forward by ICC are open to question. Besides serious questions on the covenants from the point view of the law relating to restraint of trade, public policy could be raised.
What is significant is the hidden effect of the agreement namely the making over of the individual players rights as affected to the general coffers of ICC.
ICC is already talking of damages from BCCI in the event of India not being able to participate in the world cup, and the claim for damages will be based on the so called breach on the part of BCCI to fulfill the commitment given to the “ cricketing world”. This is music of the future, we have to wait and see.
At this point I would like to go back to what was expressed at the beginning of the article. Where the Primacy lies.
1. If India is barred from world cup for no fault of the individuals who really play on the field, is such a bar in line with the objects for which ICC is established.
2. If such a Bar comes as a result of mauling individual players rights established under law and which has nothing to do with the world cup, how it will fit in with the overall objective of ICC as guardian and promoter of the game.
3. Does ICC have prerogatives to prescribe super imposing regulations on individuals for participation in its tournament?
4. Last but not the least, is the use of corporate entity
a) Every one of us knew about “East India Company” which came to India and developments up to 1947 is history now. This company was established under Royal Charter in Dec 1600. What may not be known to many in respect of this company perhaps is, this corporate entity was used as a vehicle to achieve political objective.
b) Now with serious financial disputes, that too suppressing legitimate individual rights coming to the fore rightly or wrongly and irrespective of the out come of the present dispute the need has arisen to understand clearly the object for which ICC stands for. To put it more candidly one will have to understand whether a corporate entity is being used to acquire economic power in the name of cricket, that too at the expense of a country which has a long history of cricket .If one may say so, the naïve drafting in clause 5.1 supra excluding commercial reasons for determining availability of players is the pointer to this enquiry. As said earlier the major impact of this clause is only on Indian players. ICC justifies the sponsorship contract for the event on the reasoning of “ ambush marketing” . The question still remains, can any marketing by what ever name called destroy or seek to destroy individual rights .
5. The major part of the cricketing revenue comes from India and the Indian cricketing authorities owe to the Nation the duty to ensure that such a consequence of economic power does not take place. Let us remind ourselves about the problems India is facing in the intellectual property area either by acts of omission or commission .Viz problems related to “Basmati “, “turmeric”, “Neem”, Now “Vaastu”, “Veda” , “AyurVeda” and “Gayatri”. If we could do some research I am inclined to believe that the list will be long.
Personal liberty and individual rights are the corner stones of civilized society. Now the substantive poser will be, “could an international sports body defile players’ liberty and rights”.
BCCI
The present controversy has brought into focus the manner of Administration of BCCI as a body. All of us realize it is managed by many honorary personalities. Cricket and enthusiasm for the game being what it is in India, as a consequence of which public money is being handled by BCCI and the respective regional associations, the affairs of the board simply by the weight involved spill over from the board room. Obligations undertaken voluntarily or honorarily cannot get mitigated by the nature of being voluntary or honorary. One hopes there could be no dispute on that. The BCCI president himself claims that 80% of the world’s cricketing revenue comes from India. So the public interest is visible and stands established by itself. I t follows therefore that the administration of cricketing affairs has to bear this important concomitant of Indian cricket.
One is not sure whether BCCI subscribes to this philosophy. The reason for this uncertainty is the BCCI’s criticism of ICC , alleging breach of confidentiality, when it made instalment release of certain clauses.
The following questions emerge:
a) The event agreement was signed by BCCI in May 2001.
b) The PNA was received by BCCI in Dec 2001, and signed by BCCI in March 2002.
What was the system in force by which the two agreements received due scrutiny at BCCI’s end.
The circumstances leading to the signing of the agreement are not clear to one as the facts are not fully before the public. Apparently there are two PNA’s one for the Champions trophy and the other for the world cup. There was also a change of guard at the helm of BCCI. ICC mentions about discussion on Master Rights agreement held in Australia in which Mr. Lele former Secretary is said to have participated. BCCI also talks about protest letter of Mr. Shah, dated 22nd Jun2002. There are so many missing links. With the sketchy details no one will be able to come to any opinion on the handling of the agreements at BCCI’s end.
What is disturbing is, the BCCI president himself has said as reported in the press that the Secretary was pressurized by ICC to sign the agreement. This speaks for itself about the administrative affairs of BCCI.
Are we to conclude that the agreements have not received due scrutiny because the agreement was signed under pressure: Obviously the answer has to be yes.
On the other hand, since BCCI contests a few covenants, are we to assume that the agreement has received some scrutiny. This is a possibility one has to contend with. If so certain fundamental questions arise.
1. The world cup PNA was apparently signed without query or comment if the ICC claim is to be believed. Is this true?
2. Did the import of all the clauses released by ICC namely 5.1, 13.3,13.4, &14.1 engage the attention of the board members before signature.
To illustrate one aspect if Sachin , Ganguly, Dravid and Schewag are not for compromise on their legitimate individual contracts and don’t sign the players terms and BCCI replaces them with another four in the team, will it constitute the best team in terms of the agreement. Understanding on this point is critical to the question of damages.
3. Has BCCI signed any covenant and which has the effect of binding the players if at all such binding is possible. ICC claims BCCI has agreed to the player’s terms on behalf of the players.
4. Did BCCI consider whether it is competent to contract on behalf of the players.
5. If PNA was executed in march2002, what was the objective behind in the protest being made in June2002? It is pertinent to note that according to ICC this protest is not on their records, so the plot thickens.
6. The writer heard the BCCI President saying in the press conference recently as telecast remarks to the effects that the time has come for BCCI to test the agreement. This is a revelation by itself.
Does one satisfy himself about the legality of the agreement he proposes to enter into before signature
OR
Does he sign the agreement under pressure or without due scrutiny and test the legality later.
This is a matter of public concern.
NOTICE BY BCCI TO ICC
Since the legal process has been initiated we have to wait and see the outcome of the arbitration proceedings. From the public’s point of view questions will still arise if the outcome is either way.
a) If the ICC claims for damages is upheld which will result in drain of National resources, BCCI’s accountability for the drain in addition to non participation by India in the cup and
b) If the contract is held to be invalid not resulting in drain of National resources how BCCI enters into invalid international contracts,
will haunt Indian public mind.
The Irony of the whole matter is, such a situation has arisen even though counsel of no less a personality than a former Union Law Minister who is also concerned with cricketing affairs was available to BCCI. Did BCCI take any time his advice or suggestions before signing the agreement.
A member of the public can raise many questions on the whole issue, but it is possible that these questions will continue to remain as questions only unless the matter is agitated before a proper forum.
One can only hope that the matter is resolved satisfactorily in accordance with the law of the land by BCCI.
BCCI AFFAIRS MONITORING
Many corporate entities exist in this country governed by specific legislation. The aspect of corporate Governance is high on the list of priorities in relation to company administration. Audit committees are required to be formed by the boards of certain companies. Besides there are bodies such as SEBI, Dept of Company Law Administration, Stock Exchange, to whom certain disclosures are to be made apart from and in addition to annual reports. In certain institutions representatives of public serves on the Board of Directors, Statutory prescriptions exist for qualification and appointment of secretary. For certain companies secretarial compliance is required. These measures are prescribed out of consideration for “Public Interest”.
If the present situation faced by BCCI is any indication we have to ask ourselves the question whether the time has already come for instituting a monitoring mechanism (unless such mechanism exists and which is not known to the public) in regard to the affairs of BCCI. Let us not forget many of BCCI’s decisions have foreign exchange implications as well.
GOLDEN RULE
I had the privilege of attending umpires classes of umpire Mr. Mamsa conducted by the Bombay Cricket Association at the Wankhades. Coming to LBW decision he instilled in our mind an unforgettable rule, which one should observe before putting up his finger on LBW appeal.
Ask yourself the questions:
1. Is the Batsman Out
2. If so, is he 100% out, if not the finger should never go up
I can only repeat this in his memory, how this rule is applicable to matters off the field. If translated to BCCI contract matters the poser will be:
1. Has BCCI satisfied itself on the contract?
2. If so, was their 100% satisfaction before they could commit the country.
BCCI alone has to address itself.
THE LATEST:
1. we have heard, the players have completed the formality of signing the agreement but without accepting the controversial terms. That means the basic issue, ICC’s prerogative Vs Individual rights exists notwithstanding BCCI’s contribution to the quagmire.
2. The BCCI President in a press conference on 11th Jan is reported to have said that the dispute can’t stop India from playing the World Cup and has cited the England and Wales Cricket Board’s case in regard the England team’s schedule in Zimbabwe and the pressure the team faces. If India’s participation in the World Cup is ensured in the present situation that will be the big welcome news as far as the public is concerned. But what is not digestible is his comment to the effect as reported in the media, irrespective of the verdict of the arbitration process, the Indian team will participate in the world cup as in the event of losing the case in arbitration, India will have to pay financial damage and nothing more.
Does this mean that the case for damages has taken the loop line?
Where the Accountability lies if the national resources are drained on account of the damages?
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