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WC sponsors allowed to remit
money in forex
January 31, 2003 17:48 IST
Clearing the decks for smooth flow of money to stage the 2003 cricket World Cup in South Africa, the Supreme Court allowed the event's major sponsors, including LG Electronics India (LGEI), to remit the required foreign exchange for the purpose.
However, a three-judge bench, comprising Chief Justice V N Khare, Justice Y K Sabharwal and Justice Arijit Pasayat, made it clear that the remittances made by the sponsors to the mega event would be subject to the final orders passed by the apex court.
This interim order was passed by the bench while postponing for eight weeks hearing on an appeal filed by LGEI challenging the Delhi high court order of January 22.
The high court had directed the Union Government and Reserve Bank of India that no foreign exchange, either in the form of sponsorship money or as damages, be released to the International Cricket Council if the apex body debarred India from playing in the championship or imposed any penalty or damages on players or the Board of Control for Cricket in India.
At the outset of the hearing, the sponsors' counsel, Ashok Desai and P Chidambaram, submitted before the court that the Reserve Bank had issued notices to the companies sponsoring the event on the basis of the high court order.
The bench, indicating that play must go on, passed the interim order, allowing the sponsoring companies to release foreign exchange for the event, but with a rider that all such remittances would be subject to the final orders of the court.
Assailing the high court's order, LG, in its petition, said that since the BCCI had "invoked an arbitration clause and the matter is pending before the Swiss Court of Arbitration", the high court had no jurisdiction to entertain the PIL filed by N K P Salve, Kapil Dev and four others.
Saying the company is fully committed to the cause of Indian cricket and has spent over Rs three billion till now, LG alleged that the PIL filed before the high court was a "collusive petition, instigated by its competitor and aided by the BCCI, which by recourse to a proxy petition is seeking to wriggle out of its contractual obligations having agreed to certain clauses which compromise the interest of the Indian cricketers".
Terming the effect of the high court order as "achieving something indirectly which was not possible directly", the electronic major said the high court completely lost sight of the fact that the matter was squarely covered under the contractual obligations in which it had no jurisdiction.
"The high court has also restrained the petitioner from advertising in respect of the World Cup, 2003, although LG is a global partner of ICC and has a valid, existing and concerned contract for which it has paid lawful and valuable consideration to the extent of approximately Rs 40 [400 million] crores and is obliged to pay further amounts from time to time," it said.
LG has acquired commercial and marketing rights for not only this World Cup but for global cricketing events and championships including the next World Cup over a period of five years, starting from 2002, it said.
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