MCA terminated the agreement on the ground of default in payments and covered the name of the stadium with black cloth on Tuesday, which led to the company filing a petition at the High Court, according to a source familiar with the development.
MCA had invited proposals for acquiring, naming and for certain ancillary rights in respect of the stadium which was being constructed alongside Pune Expressway, including the right to construct and own a club on a contiguous piece of land adjacent to the Stadium.
After Sahara expressed its interest to acquire the rights in respect of the Stadium and Club, a non-binding Term Sheet and Master Agreement were executed between the parties. A naming rights agreement was also executed under which MCA granted to Sahara an exclusive right to name the Stadium which was consequently named Subrata Roy Sahara Stadium.
Sahara is said to have paid almost Rs 73 crores as advance for completion of the Stadium for 2012 IPL season and till date it has paid around Rs 98 crores even though the definitive documents were yet to be executed between parties.
Thereafter, MCA requested for further advance of Rs. 15 crores from Sahara, and while the parties were finalising the terms and conditions on which such advance was to be given, MCA sent a notice to Sahara, alleging default in payment and non-payment of dues by Sahara and terminated the agreements.
Sahara filed a petition under Section 9 of Arbitration and Conciliation Act in Bombay High Court against MCA for “wrongful termination of the agreements” and by way of an interim relief, the HC directed MCA not to cover the name of the Stadium until Wednesday.