MUMBAI: Financially distressed media company Deccan Chronicle Holdings Limited (DCHL), the owner of Indian Premier League (IPL) franchise Deccan Chargers, on Wednesday got a breather from the Bombay High Court in its dispute with the Board of Control for Cricket in India (BCCI).

The high court has asked DCHL to furnish an unconditional bank guarantee of Rs 1 billion within 10 days to BCCI, after which the cricket board will revoke termination of the Deccan Chargers franchise contract.

The direction for providing a bank guarantee is the result of BCCI?s apprehension whether DCHL was capitalised enough to run the IPL team. According to BCCI, every IPL franchise requires at least Rs 1.5 billion to run its affairs every year. DCHL disputed this claim saying the amount required is less than what was being quoted by the cricket board.

DCHL counsel Zal Andhyarajunam argued that the franchise fee payable to BCCI is constant every year save for fluctuations in dollar. DCHL had spent Rs 1.03 billion during season 5 of IPL which includes franchise fee of about Rs 470 million.

The high court also paved the way for the arbitration process between DCHL and BCCI by appointing retired Supreme Court judge C K Thakkar as the arbitrator, after the two parties could not reach an agreement on a mutually acceptable arbitrator.

Additionally, DCHL has taken an oath that it will immediately clear dues amounting to Rs 330 million of both Indian and foreign players in the team.

Andhyarajunam also said that a consortium of banks including Yes Bank have agreed to finance DCHL to run the IPL team for the next season of the tournament.

BCCI counsel Rafiq Dada said DCHL?s debt of Rs 42 billion from as many as 20 banks and financial institutions was a matter of grave concern for the BCCI. The BCCI was apprehensive about DCHL?s financial condition to run the IPL team.

The Yes Bank had filed Chamber Summons with the HC to be made a party to the arbitration process. It wanted BCCI to revoke termination of Deccan Chargers contract and deposit Rs 410 million due to Deccan Chargers from BCCI in their account with Yes Bank.

Dada contended that it was not in a position to release the money in Deccan Chargers? Yes Bank account since there had been similar demands from other banks. DCHL has given its nod for BCCI to deposit money due to it into its Yes Bank account.

The BCCI is worried that if the Deccan Chargers was reinstated with support from multiple banks it would be faced with similar claims from banks with each asking the cricket board to deposit funds due to Deccan Chargers into the franchise?s account with them in case of a dispute.

BCCI also stated that DCHL can?t delegate or sub-contract rights granted under franchise agreement to any other party. If they do so it?s a breach of contract, Dada said.

The court assured that it would protect the BCCI from future claims by banks. It also said that the BCCI can invoke bank guarantee in case Deccan Chargers defaults on any payment in future.

The HC had on 17 September directed BCCI to maintain status quo and not invite bids for a new franchise to replace Deccan Chargers in the IPL.

The BCCI had on 15 September terminated the franchise agreement with Deccan Chargers for breach of contract terms. The cricket board had along with DCHL, the owner of Deccan Chargers team, called for bids to sell the Hyderabad-based franchise.

DCHL had rejected the lone Rs 9 billion bid of PVP Ventures despite the bidder meeting the eligibility criteria of the BCCI.

If the DCHL manages to furnish a bank guarantee of Rs 1 billion, it will become the third franchise to stage a comeback after a legal battle. Earlier, Rajasthan Royals and Kings XI Punjab were reinstated as franchises after contesting BCCI?s termination notice in court.