Devas Joins Cairn To Seize Air India's Assets Abroad

Devas termed Air India an "alter ego" of the Indian state, saying that it should be liable for the sovereign's debt.

Air India flight.

(Photo: PTI)

Devas Multimedia Pvt is seeking to seize Air India Ltd's assets abroad, after winning over $1.2 billion in international arbitration from India. The company has now joined Cairn Energy Plc, which has also sought to seize Air India Ltd.'s assets abroad, reports Bloomberg.

Devas termed Air India an "alter ego" of the Indian state, adding that they should be liable for the sovereign's debts, the report further said.

Asking Air India to pay the amount or forfeit its US property including planes, cargo handling equipment and artwork, Devas filed a petition in New York.

With this move, India's plans to sell the indebted loss-making carrier will be threatened, while the country's image as an investment destination is at the risk of being damaged.

Moreover, India had suffered two big losses in international arbitrations last year. One, a $3 billion tax dispute with Vodafone Group Plc and another, a $1.2 billion dispute with Cairn.

Both the rulings have been challenged by India.

While Devas is seeking the award money, India wants to liquidate the company and investigate an alleged fraud.

The dispute began back in 2011 when the state-owned company Antrix Corp annulled an agreement with Devas. After petitioning that the the annulment wore down the value of its multi-million dollar investments, Devas was awarded more than $111 million plus interest by an arbitration tribunal. It also won $562.5 million in damages plus interest from separate proceedings at the International Chamber of Commerce, Bloomberg reported.

However, the company claims that Antrix has paid neither of these.

(With inputs from Bloomberg)