Cricket Business: ICC threatens BCCI, can terminate hosting agreement for the T20 World Cup in 2021

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All is not well between the International Cricket Council (ICC) & the Board of Cricket Control of India (BCCI). The same is again highlighted as the world body has threatened to terminate the agreement with BCCI for hosting the T20 World Cup in India in 2021. According to a report published in Times of India, ICC and BCCI has been exchanging ugly emails over completion of tax exemption formalities. The issue has led ICC to finally invoke clause of the agreement via which they are entitled to terminate the Host Agreement with BCCI with immediate effect.

The ICC’S general counsel and company secretary Jonathan Hall wrote to BCCI, “In light of the BCCI’S notification of force majeure, we would highlight the obligation of the BCCI set out in clause 20.1 (a) of the Host Agreement and that IBC (ICC Business Corporation) is entitled to terminate the agreement with immediate effect at any time from 18th May 2020 in accordance with clause 20.2”.

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What is the reason for this dispute between ICC & BCCI ?

In 2018, BCCI signed an Host Agreement with ICC’s commercial arm IBC (ICC Business Corporation) to host the 2021 T20 World Cup and 2023 ODI World Cup in India. According to the understanding in the agreement, it was the deliverable of the host board to take tax exemptions for the event from the Indian government. But despite of considerable time at hand since signing the agreement, BCCI could not complete the said formalities, deadline for the same ended in April 2020.

Post this deadline – started the ugly email exchange between both the parties. BCCI on its part asked for extension of the deadline to 30th June in lieu of the lockdown in the country – which the ICC Commercial arm declined and sent them this threatening email through which they can terminate the host agreement.

Background to this dispute between BCCI & ICC

The BCCI also hosted the 2016 T20 World Cup in India and tax related dispute between the parties have already taken the legal route. For the record, ICC has withheld India’s $23 Mn (150 Cr per than exchange rate) because the tax authorities in India did not grant exemption to the event in 2016.
BCCI on its part has been continuously requesting the Indian government for the tax exemptions and the matter was also raised during the BCCI’S Apex Council meet few months back.

“It was decided at a recent online meeting of the BCCI’s Apex Council that the government would be requested for tax exemption. The request will be formally made after the lockdown. The BCCI thinks this is the best way to ensure that these two World Cups are held in India and it doesn’t lose out on revenue from the ICC,” one of the official tracking developments was quoted recently.

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