In a major relief for Nimbus Communications, the Bombay High Court on Thursday directed three banks to give it (Nimbus) three days notice before forfeiting bank guarantee of Rs2,000 crore.
In a major relief for Nimbus Communications, the Bombay High Court on Thursday directed three banks to give it (Nimbus) three days notice before forfeiting bank guarantee of Rs2,000 crore.
Justice SJ Vazifdar was hearing an application filed by the broadcast rights holder seeking injunction on BCCI’s notice to the banks for forfeiture of the guarantee following default on payments by Nimbus.
Janak Dwarkadas, counsel appearing for the banks, informed the high court that they were not ready to forfeit the guarantee at this stage. After Dwarkadas’s statement, justice Vazifdar remarked that there was no need for high court to hear Nimbus’ application.
Nimbus had also filed a petition challenging BCCI’s decision to terminate the contract for defaulting on payments. Iqbal Chagla, counsel for Nimbus agreed that the company was in default but argued that they had sought extension of time for fulfilling their commitment. Chagla said: “Before that (deciding on extension of time) BCCI sought to terminate the contract and seek forfeiture of the bank guarantees,” argued Chagla.
BCCI counsel Rafiq Dada informed the court that, Nimbus had to make 50 per cent of the payment (Rs137 crore) a month before commencement of the West Indies series on November 6, ie, by October 7. However, when they failed to make the payment, BCCI reminded them through a letter on October 30, said Dada.
A four-year-deal was signed between Nimbus and BCCI in October 2009 for Rs2,000 crore for telecast rights of matches to be played in India. Nimbus’s petition challenging the termination will come up for hearing in due course of time.
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