The failed deal between Antrix and Devas Multimedia
The Hindu
Why has a Canadian court ordered the seizure of more than $30 million worth of AAI’s assets? How can a foreign power issue such an order?
In 2005, Devas Multimedia signed an agreement with Antrix —a commercial arm of the Indian Space Research Organisation (ISRO) —to provide multimedia services to mobile users using the leased S-band satellite spectrum to be provided by Antrix. In 2011, the UPA-2 government annulled this agreement on the ground that it needed the S-band satellite spectrum for national security and other social purposes. This abrupt annulment led to three legal disputes – a commercial arbitration between Antrix and Devas Multimedia at the International Chambers of Commerce (ICC), and two bilateral investment treaty (BIT) arbitrations brought by the Mauritius investors in Devas Multimedia under the India-Mauritius BIT (CC/Devas tribunal) and by Deutsche Telekom – a German company - under the India Germany BIT (DT tribunal). India lost all three disputes.
The ICC tribunal ordered Antrix to pay $562.5 million-plus interest as damages to Devas for wrongfully repudiating the contract. A U.S. court, in late 2020, dismissing all the contentions of Antrix, confirmed the 2015 commercial arbitral award in favour of Devas. The CC/Devas and the DT tribunals ordered India to pay damages of $160 million plus accrued interest to Devas’ foreign shareholders and $132 million to Deutsche Telekom respectively. In the meanwhile, the National Company Law Tribunal, last year, on a case filed by the Indian government, ordered the liquidation of Devas Multimedia on the ground that the affairs of the company were being carried on fraudulently.