Force majeure and IPL

 

Force majeure and IPL

How I wish Pahalgam had happened three years ago. Do not get me wrong, I do not welcome war; indeed I am a pacifist, perhaps because I am a weakling, in mind and body. No, that did not come out right. Please do not infer pacifists are that because they are weak. I do not know whether I would have been one had I been more sturdily built and been mentally stronger. No point dwelling on counterfactuals; as someone said, “History does not reveal its alternatives!”

About three years ago, I kind of forced myself on the School of Management in the private university I was working to let me give a lecture to their students on contractual clauses. This was for infrastructure projects where the entity offering the concession is a government agency, and the party availing the concession is a private party. My talk was to focus on how the responsibilities on various issues are shared between the parties to the contract, particularly when the project was to be executed on Public Private Partnership (PPP) mode. Risk assessment/allocation/management was to have been the thrust of my talk.

I was well prepared (I had a then recently retired IAS officer, the Chief Secretary of Government of Odisha guiding me on this) and also had a PowerPoint slide showing a detailed table as to who (the government agency or the private party) on which issue carries the risk should something goes wrong.

Suppose the project involved import of goods, who would take the risk due to fluctuations in exchange rate is spelled out in the agreement, called the Concession Agreement. What if something happened that could not have been foreseen, and the project had to be stopped or at least delayed? Who would bear that cost?  This is where force majeure comes into play. All of this went over the head of the students (I am not even sure that even the few faculty members who attended understood). Perhaps I was talking at a level higher than to which they had been exposed.

How such a situation should be handled would have been spelled out in the agreement. This is where along with force majeure, IPL comes in. IPL was in a limbo for about a week, thanks to the terrorist attack in Pahalgam. The franchise stake holders (including Preity Zinta) would have been left hanging, and so would have been BCCI, the ultimate private party (for the uninitiated, BCCI is not a government entity; is the waving of the Indian flag appropriate in a match involving the so-called Indian team controlled by BCCI?) benefitting from IPL, not to mention the players.

No one expected that there will be a terrorist attack, but there it was. The SOPs (Standard Operating Procedures) did not include this contingency. Everyone must have been flying blind, but hoping that the situation would stabilize. In double quick time, thanks to the ever ready armed forces and the political leadership, the situation did stabilize. Now IPL is back on track. (I am writing this in the afternoon of May 15, 2025.)

There would be a few losers. Four stadiums have lost revenue from a match or two that were scheduled in each, not including the knock-out stage fixtures. These would have been in Dharamsala, Chennai, Hyderabad and Kolkata.

Jaipur, not too far from the Pakistan border, is a finger-in-your-eye type of response, daring Pakistan. Yet, no matches in Dharamsala. Had India really wanted to throw a dare, Dharamsala must have been retained and that would have brought out the dimple in Preity Zinta’s cheeks!

Why no matches in Hyderabad, as inland as Bengaluru is, or more so? Why Mumbai and no Kolkata and no Chennai? Perhaps I should check the original schedule. No patience. Let that slide.

One more small point, fishing in troubled waters. The England and Wales Cricket Board threw in their offer to host the remaining matches. If your neighbour’s house is on fire, it is OK to light up your cigarette in the fire!

To understand the unseemly hurry to get the matches back on (to save money for everyone concerned, including the TV network), one has to turn the page back to force majeure. Everyone would have lost. As the scenario is unfolding, only the unlucky few have lost. That is good.

My having worked in an engineering consultancy company, being involved in a PPP project, and getting my feet wet on risk assessment/allocation/management enabled me to tentatively understand the whys of the IPL 2025 rescheduling. 

Raghuram Ekambaram