25 October, 2019
Bhrigu A. Pamidighantam
One-hundred and sixty-five years into the establishment of the “no conflict rule” in the Aberdeen Railway Case,[1]‘conflict of interest’ persists to be a major challenge in legal practice and jurisprudence alike. It has attained a special relevance in the field of Sports Law and governance in recent times – with a meteoric rise in the media attention, significance of sporting agencies and commercialisation of sports – threatening the pillars of ethics, integrity and good governance in sports. This paper attempts to explore the concept of ‘conflict of interest’ and examining its forms and elements, while investigating the present-day scenario of Indian Cricket that has been plagued with players and management members alike, being served with show-cause notices for ‘conflict of interest’[2] under Article 38 of the BCCI Constitution. In concluding, the author shall also scrutinise the findings of the Lodha Committee (2015) for reform in Indian cricket, with specific emphasis on ‘conflict of interest’[3] – a subject that is extremely pertinent in the Indian context presently but has diminutive literature on the same.
It is imperative that the standalone term ‘interest’ is defined before delving further into the larger matter at hand viz. when there might arise conflicts to said interest. An ‘interest’ may be defined as a commitment, obligation or goal concomitant with a specific practice or social role – either personal or pecuniary in nature.[4] Despite the fact that a definitive understanding of what constitutes ‘conflict of interest’ persists to be elusive and subject to debate among academicians and legal scholars, the same is said to occur when an individual or enterprise is simultaneously subject to two or more co-existing interests in direct ‘conflict’ with each other in as much as they generate negating benefits and loyalties.[5] The subsequent decision of such individual or enterprise, in scenarios wherein the ‘secondary’ or personal-based interest is unduly given precedence over the ‘primary’ interests in furtherance of holding office in professional capacity, might prove counter-productive to a fiduciary duty owed, thereby adversely affecting a third-party.
Notwithstanding scenarios whereby they are given precedence over ‘primary’ interests, it is noteworthy that ‘secondary’ interests – in and of themselves are not objectionable per se and are neither indicative of a lapse in furtherance of the duties associated with holding office nor do they pose an ethical or moral conundrum. That being said, it is equally important to apprehend and duly anticipate the looming threats to the decision-making process in situations attracting a ‘conflict of interest’ that may be rendered as compromised – thereby affecting the integrity and ethics of reaching such decision. The identification of a ‘conflict of interests’ is the first step towards separating such interests at the earliest and thereby preventing any party from gaining an undue advantage by giving precedence to their ‘secondary’ interests ahead of their ‘primary’ interests.
In certain situations wherein an individual or enterprise might exploit their professional or official capacity for a personal or pecuniary benefit, the more commonplace forms of such ‘conflict of interest’ have been identified as but are not limited to (a) ‘self-dealing’ – wherein an office-holder, while controlling an enterprise, simultaneously causes it to enter into transactions with their office in official-capacity or with another organisation thereby accruing personal benefits by virtue of holding such office; (b) ‘outside employment’ – wherein the interest of one job is in either direct or indirect contravention of another thereby culminating in a ‘conflict of interests’; (c) ‘familial interests’ – wherein an official by virtue of holding such office causes an enterprise to enter into transactions with another enterprise owned by a close relative or which a close relative benefits from; (d) ‘receiving gifts or seeking favours’ – serves as one of the most conventional methods wherein a ‘conflict of interest’ may stem from either “a friendship of means” or otherwise whereby the classic expression “you scratch my back, and I’ll scratch yours” is at play. It is the need of the hour to implement policies that either end or at least limit the opportunities for individuals or enterprises to exploit such positions.[6]
While ‘conflict of interest’ is a commonplace phenomenon in the management and governance of almost all industries and businesses, it is not a stranger to the realm of ‘Sports Law’ and its jurisprudence. The commercialisation of sports, in more recent times, coupled with the rise to prominence of sporting agencies and the increased media and public attention has culminated in the idolising of sportspersons. As a consequence, the scrutinising of every single move of theirs, their managers and associates, and the organisers has placed upon them the expectation of exhibiting high levels of ethical performance and social responsibility.[7] In fact, legal commentator and expert in the field of ‘Sports Law’ – Emma Sherry substantiated that among other effects on the athletes and the game itself, the same has also had the effect of bifurcating ‘conflict of interest’ claims into the accruing ‘responsibilities of the business’ and the domain of ‘ethics and morality’.[8]
The ‘roles and responsibilities of business’ extended to (a) ‘interest’ – one of the most fundamental concepts to ‘conflict of interest’ itself, commentator N.R. Leubke defined it as “a share or right on the basis of which one can only materially gain”.[9] However, as stated earlier it must be impressed upon that an interest may be both personal and pecuniary. An apt example may be provided in the form of the British Government intervening to prevent Rupert Murdoch’s BSkyB TV company from taking over English top-flight football team Manchester United citing an “unhealthy conflict of interest”; (b) ‘benefit and damage’ – encompassing both tangible and non-tangible gains, with the former often overshadowing the latter (akin to the scenario under ‘interest’ based claims), the most important rationale behind disclosing ‘conflict of interests’ whereof, are damages – both potential and actual; (c) ‘professional judgement’ – legal scholar Solomon invokes the ‘professional judgement’ of an arbiter to help set forth individuals and enterprises on an ethical path when confronted by the dilemma faced from conflicting roles and the subsequent lack of singular principles of ethics.[10] The commercialisation and professionalisation of sports has culminated in an increase in the use of professional judgements wherein a regulatory ombudsman has been appointed in more recent times, thereby filling the lacuna attributable to the lack of statutory regulations. That said, it should, it be noted that the chance of a ‘conflict of interest’ in highly regulated or process-oriented scenarios decreases drastically.
As opposed to the ‘roles and responsibilities of businesses’, the domain of ethics and morality deals mostly with non-commercial and intangible violations under ‘conflict of interest’ extending to: (a) ‘obligation and duty’ – lynchpin to the ethics of the game, a ‘conflict of interest’ here has the potential of interfering with the discharge of duties, especially where there exists a fiduciary duty. An illustration can be drawn towards former Board of Cricket Control in India (“BCCI”) Secretary – Anurag Thakur – after getting himself appointed as the “permanent President” of the Himachal Pradesh Cricket Association (HPCA) selecting himself to lead their Ranji squad is an apt example of a ‘conflict of interest’ with regard to ‘obligation and duty’;[11] (b) ‘voluntary and avoidable’ – a ‘conflict of interest’ situation identified by commentators including Boatright draws implication that there was some voluntary and intentional wrongdoing that the individual or enterprise had an obligation to avoid; (c) ‘morally wrong or a violation of trust’ – although finding oneself in a “morally wrong” ‘conflict of interest’ situation is not problematic, knowingly committing to such situation warrants scrutiny and public pressure from sporting governing bodies and the media alike. One such example of avoidance of a ‘conflict of interest’ would be that of Roger Binny – one of the selectors for the Indian Men’s Team – leaving the deliberations upon his son’s name being taken for consideration.
The implications of being embroiled in a ‘conflict of interest’ scenario may be bifurcated under an ‘actual’ and a ‘potential conflict of interest’.[12] With respect to the latter, despite individuals and an organisation identifying and not proceeding due to a ‘potential conflict of interest’, the mere perception of a ‘conflict of interest’ has damaging repercussions since the sheer unethical appearance in itself can shatter the confidence of the public. “A good reputation is difficult to achieve but, easy to lose” more so, in the case of sportspersons and sporting organisations due to the high societal expectations placed on them.
Legal commentator J.S. Demski rightly stated that “novelty is not the presence of conflict of interests, but their management”.[13] As substantiated in the aforementioned points – the presence of a ‘conflict of interest’ is independent of individual or enterprise subsequently acting upon it for undue gain. Among the more commonplace modus operandi in seeking to prevent decisions spurred by objectives in contravention to each other are ‘full disclosure’ at the outset, formulation of a ‘code of ethics’, and recusal and removal of the decision-maker from either a particular decision or the process altogether.
The issue of ‘conflict of interest’ in sports has over the years attained a certain mainstay in the laws and regulations of sports governing bodies – with the International Olympic Committee (in 1999) and the National Sporting Bodies for the Canada (2002), United Kingdom (in 2004) and Australia (in 2004) tackling the issue either through a general ‘code of ethics conduct’ or specific provisions addressing ‘conflict of interest’ viz. Rule 38 of the BCCI in India.
Founded by the BCCI in 2008, the Indian Premier League (hereinafter, the IPL) is the biggest cricket league in the world and attracts the greatest cricketing stars. Valued at US$ 6.7 Billion in 2019, despite its meteoric commercial rise the IPL has had its fair share of controversies. However, the events that transpired during IPL VI rocked Indian Cricket to its very foundations – with players and management members alike being embroiled in acts of ‘gross mismanagement’, ‘corruption’, ‘match-fixing scandals’, as well as ‘conflicts of interest’ that extended to the uppermost echelons of the BCCI Management. In lieu of such events, while dismissing multiple petitions brought forth against the BCCI’s misdemeanours,[14] the Supreme Court of India constituted separately – the Mudgal Committee (2014) and consequently the Lodha Committee (2015) to submit their findings and recommendations on certain issues – one of which was that included under Chapter VIII and pertaining to ‘transparency’ and ‘conflicts of interest’.[15] The Lodha Committee noted the apparent lack of awareness pertaining to the ‘conflict of interest’ amongst those implicated as well as among senior members of the BCCI. Deeming the prevention of ‘conflicts of interest’ to be primordial to the ethics and integrity of the sport, the Committee on thorough examination of methods employed by various international sporting bodies worldwide, while categorising ‘conflict of interest’ situations under ‘tractable’ and ‘intractable’ – with the latter warranting a removal from office of power.
The Committee also contemplated five different forms of ‘conflict of interest’ viz. (a) ‘direct or indirect interest’ – whereby familial ties and partners and close aides were construed as compromising an individual’s discharge of his or her duty; (b) ‘compromised roles’– whereby upon holding two distinct posts in either of the BCCI, a member association or an IPL franchise – an individual’s role may be construed as having been compromised; (c) ‘commercial contracts conflicts’ – have the power to essentially compromise the discharge of an individual’s primary interests; (d) ‘prior commercial relationships’ – constituted between an individual and a vendor subsequently engaged by the BCCI, a member association or an IPL franchise; and (e) a ‘position of influence’ – in as much as such position might compromise decision making, control or management in relation to such individual’s friends, relatives, or close affiliates; all of which were subsequently included verbatim under Rule 38(1) under ‘conflict of interest’ in the newly drafted BCCI Constitution. Moreover, Rule 38(2) mandates that all office-bearers are compelled to make full and complete disclosures of any actual or potential event culminating in a ‘conflict of interest’ in discharge of their duties. Furthermore, one of the most important suggestions furthered by the Lodha Committee was that no individual shall simultaneously hold more than one of sixteen posts enlisted under Rule 37(4) in the BCCI and the national cricketing ecosystem.[16]
Consequently, this culminated in the serving of ‘show cause’ notices for acting in ‘conflict of interests’ in violation of Rule 37(4) of the BCCI Constitution against four former Indian Cricketers namely – Rahul Dravid, Sachin Tendulkar, V.V.S. Laxman and now newly-elected BCCI President Sourav Ganguly. In addition to this, the Committee’s recommendations paved the way for the appointment of an independent ombudsman-cum-ethics officer in the form of Retd. Justice D.K. Jain who subsequently adjudicated the aforementioned cases of ‘conflicts of interest’ all off which shall now be analysed individually. Kicking-off with Rahul Dravid’s appointment as director of the National Cricket Academy which culminated in a ‘show-cause’ notice being sent by the ombudsman-cum-ethics officer on grounds that Dravid was also employed full-time as a vice-president with India Cements – the owner of IPL franchise Chennai Super Kings thereby acting in contravention to Rules 38(4)(f) and 38(4)(j) of the BCCI Constitution preventing individuals from holding more than one of the sixteen posts enlisted. However, Dravid refuted the claim citing ‘abeyance’ with regard to his India Cements post and despite the then Chairman of the Committee of Administrators (CoA) satisfied with such response, the Ombudsman held that to satisfy norms in the constitution, Dravid will have to resign from his post at India Cements.
In this scenario, the interpretation with regards to the accruing potential ‘conflict of interest’ is not understood as holding two offices concurrently, but rather, undue influence of an individual’s professional conduct. The usage of the term “may” is indicative that holding-office even in ‘abeyance’ as a conflict of interest since even a mere possibility of wrongdoing trumps the reasonability test.
Notwithstanding the allegations against Dravid, Tendulkar, Ganguly and Laxman while serving on the BCCI’s Cricket Advisory Committee (“CAC”) simultaneously held coaching posts with their respective IPL franchises viz. the Mumbai Indians, the Delhi Capitals and the Sunrisers Hyderabad and were let off on the technicality that their posts with the CAC were “honorary” and that they would resign from the CAC subsequently.[17]On examination and thorough scrutinization of the Lodha Committee report vis-à-vis other regulations, it is evident that the guidelines “heavily borrow” from the IOC’s ‘Code of Ethics’. Additionally, there is a consensus among the BCCI member and legal commentators that the report failed to substantially understand many of the commonplace problems and practices associated with Indian cricket, especially with regards to the elections process. Moreover, the guidelines seem extremely restrictive in limiting the job opportunities afforded, especially to retired cricketers – who now shall be compelled to reconsider taking up honorary positions in their fields of expertise since it shall be to their commercial detriment. On the flipside though, this could lead to a creation of new jobs and thereby significantly ushering in changes to the status quo and dynamics of the cricketing
[1] Aberdeen Railway v. Blaikie Bros (1854) 1 Macq 461.
[2] Atreyo Mukhopadhyaya, ‘Conflict of interest & a few shades of grey?’ <http://www.newindianexpress.com/sport/cricket/2019/aug/08/conflict-of-interest–a-few-shades-of-grey-2015893.html> accessed 2 September 2019.
[3] Report of the Supreme Court Committee on Reforms in Cricket, Vol. 1, 2015.
[4] Komesaroff PA, Kerridge I, Lipworth W. “Conflicts of interest: new thinking, new processes”. Internal Medicine Journal. 49 (5); 2019: 574-577. https://doi.org/10.1111/imj.14233.
[5] Rosner, Scott. “Conflicts of Interest and the Shifting Paradigm of Athlete Representation.” University of California, Los Angeles Entertainment Law Review 11, no. 2 (2004): 194-245.
[6] Conflicts of Interest Policy, Sport and Recreation, <https://www.sportandrecreation.org.uk/pages/governance-library-conflicts-of-interest>accessed 2 October 2019.
[7] Vallance, Emile. (1995), Business Ethics at Work, Cambridge University Press, Cambridge Vol. 3 No.2, pp.16-29.
[8] Sherry, Emma, David Shilbury and Greg Wood. “Wrestling with ‘conflict of interest’ in sport management” Deakin Corporate Governance 7, no. 2 (2007): 267-277.
[9] Luebke, N.R. (1987), “Conflict of interest as a moral category”, Business & Professional Ethics
Journal, Vol. 6 No.1, pp.66-81.
[10] Solomon, R. (1996), “Virtue ethics and business ethics”, in Woldring, K. (Eds), Business Ethics in Australia and New Zealand: Essays and Case, Thomas Nelson Australia, Melbourne, pp.22-44.
[11] Ushinor Majumdar, “I hereby select myself” December 15, 2016. Accessed 17 October 2019. <https://www.outlookindia.com/magazine/story/i-hereby-select-my-self/294865>.
[12] Feerick, John, David Feher, Craig E. Fenech, Charles Grantham, Steven C. Krane, and Nicole Coward. “Panel II: Conflicts of Interest in Sports.” (2003): 405-451.
[13] Demski, J.S. (2003), “Corporate conflicts of interest”, Journal of Economic Perspectives, Vol. 17 No.2, pp.51-72.
[14] Board of Control for Cricket in India vs. Cricket Association of Bihar Civil Appeal No. 4235 of 2014.
[15] Report of the Supreme Court Committee on Reforms in Cricket, Vol. 1, 2015.
[16] Shekar, Seshank. “The impact of the Lodha Committee BCCI report on sports governance in India” LawInSport, December 15, 2016. Accessed August 30, 2019. <https://www.lawinsport.com/content/articles/item/the-impact-of-the-lodha-committee-bcci-report-on-sports-governance-in-india?highlight=>.
[17] Habib, Khurram. “What’s this conflict of interest issue eating up Indian cricket?”, Hindustan Times, August 14, 2019. Accessed 28 August 2019. <https://www.hindustantimes.com/cricket/what-s-this-conflict-of-interest-issue-eating-up-indian-cricket/story-UFPeU6znjeHxawTh7Ev4mK.html>.
Bhrigu A. Pamidighantam 
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