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IPL-Vivo deal suspension: More than just sentimental reasons

Written by Mihir Vasavda
| New Delhi |

Published: August 7, 2020 1:23:08 am

The BCCI’s press release did not give any reason for the decision, although it is seen as the fallout of the public backlash against the board for continuing its deal with Vivo. (File Photo/BCCI)
The current anti-China sentiment in the country may have been cited as the reason for mobile phone manufacturer Vivo and the cricket board suspending their sponsorship contract, but legally that argument does not have a firm footing.

Instead, the pandemic-induced change in venue and timelines would have more likely provided a backdrop for mutually agreeing to implement a one-year moratorium, according to legal experts.

“If both parties mutually agree, they can make any alterations to a contract such as a one-year break or suspension like this,” sports lawyer Nandan Kamath said. “(But) unlike a government direction that might prohibit or embargo such dealings, mere negative public sentiment towards Chinese companies does not in itself constitute a force majeure event.”

On Thursday, the BCCI confirmed that Vivo will not be the title sponsor for this year’s Indian Premier League (IPL), which begins in the UAE next month. “The BCCI and Vivo Mobile India Pvt Ltd have decided to suspend their partnership for Indian Premier League in 2020,” the board said in a single-sentence statement.

The BCCI’s press release did not give any reason for this decision, although it is seen as the fallout of the public backlash against the board for continuing its deal with Vivo.

Weeks after the border skirmish between the Indian and Chinese soldiers in the Galwan Valley, the BCCI had said they were reviewing their deals with Chinese sponsors. However, after the IPL’s governing council meeting last Sunday, they decided to go ahead with their China-linked sponsors.

This resulted in the Confederation of All India Traders (CAIT) writing to Home Minister Amit Shah and External Affairs Minister S Jaishankar, opposing the decision. Swadeshi Jagran Manch, an RSS affiliate, too had called on fans to consider boycotting the league.

On Tuesday, it was reported that the board had started looking out for a new sponsor for this season and on Thursday, they officially announced that the deal with Vivo was temporarily suspended by mutual consent.

This is the first instance in Indian sport that such a situation has arisen.

Although unprecedented, a one-year break can be implemented if it is mutually agreed by both parties. However, according to Kamath, the anti-China mood in the country does not constitute a force majeure event. Force majeure allows the suspension of obligations, which gives the parties to mutually discuss mitigation of the loss that surfaces. But to trigger the clause, it has to be impossible and not merely inconvenient for the parties to deliver what was promised.

Instead, rescheduling the tournament and moving it outside India ‘can be viewed as a force majeure event’, Kamath added. “The material shift in timelines and location caused by the pandemic could be viewed as a force majeure event as they could be material alterations to the original contractual intent. This could have provided the backdrop for suspension of obligations by mutual agreement.”

In 2018, Vivo acquired the title sponsorship of the IPL for a period of five years by promising to pay the BCCI close to Rs 440 crore each year. The agreement was that the IPL would be held every year in the March-to-May window in India, which is likely to give the sponsors a high return on investment due to the high viewership during the summer months.

The IPL this year was originally scheduled to begin on March 29. However, the outbreak of the pandemic and the consequent lockdowns forced the BCCI to postpone the tournament and eventually move it outside India for safety reasons. The IPL will now be held from September 19 to November 10 in Dubai, Abu Dhabi and Sharjah.

The mutually-agreed decision will also give BCCI and Vivo the option to add an extra year to the contract by considering 2020 as a ‘zero year’.

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