India has lost the arbitration case in an international tribunal over its space marketing agency Antrix Corp, annulling a contract with city-based private multimedia firm Devas, and may have to fork out millions of dollars in damages. The government, however, said that the order is being examined and “legal recourse will be taken”.
A Permanent Court of Arbitration (PCA) tribunal based in the Hague ruled that the Indian government had acted “unfairly” and “inequitably” in cancelling the contract involving use of two satellites and spectrum.
The tribunal has found that the Indian government’s actions in annulling the contract and denying Devas commercial use of S-band spectrum constituted an expropriation, Devas Multimedia Private Ltd. said in Bengaluru on Tuesday.
In its ruling on Monday, the PCA tribunal also found that India breached its treaty commitments to accord fair and equitable treatment to Devas’s foreign investors, the company said in a statement.
Devas Chairman Lawrence Babbio, who is also the former Vice Chairman of the largest telecommunications company in the United States, Verizon, said in an official statement:
Devas committed to partner with Antrix on a hybrid satellite-terrestrial infrastructure project to bring nationwide satellite/terrestrial broadband wireless access and audio visual services to India. With today’s PCA award, two international tribunals have now unanimously agreed that financial compensation should be paid after the annulment of Devas’s rights. Other courts in France and the United Kingdom have agreed that the award against Antrix ought to be enforced. We prefer a mutually agreeable resolution of this matter. But until that occurs, Devas and its investors will continue to press their claims before international tribunals and in courts around the world.
The government may have to pay close to $1 billion in damages to Devas multimedia.
Indian Space Research Organisation(ISRO) officials said they were yet to get details of the ruling. The deal had cost five senior ISRO scientists, including its former chair man G Madhavan Nair, their government jobs.
The ruling is the second by an international tribunal arising out of the cancellation of the Devas-Antrix contract.
The unanimous decision included the arbitrator appointed to the tribunal by India, Devas said.
In September 2015, in a jolt to Antrix, the commercial arm of ISRO, the International Chamber of Commerce’s (ICC) arbitration body International Court of Arbitration had asked it to pay damages worth USD 672 million (Rs 4,432 crore then) to Devas Multimedia for “unlawfully” terminating the deal five years ago on grounds of national security.
CCS had annulled the deal based on the recommendation of the Space Commission on the ground that it was not in the security interests of the country.
It’s unfortunate that International court has come to such a conclusion. What we have to do this time is to pull up all our resources and fight out this issue in the appellate court, so that we can control the damage. We have to engage Devas into a dialogue and probably we may have to compensate on actual loss, not a presumptive loss.G Madhavan Nair, Former ISRO Chairman
How it All Started
Antrix, the commercial arm of ISRO, and Devas had signed a deal which would have helped Devas deliver internet and broadband services to remote areas.
Under the deal signed in 2005, Antrix was to provide 70 MHz of the scarce S-Band wavelength to Devas for its digital multimedia services by leasing 90 per cent of the transponders in ISROs GSAT-6 and GSAT-6A satellites.
Devas, in turn, was to pay Antrix a total of USD 300 million over 12 years.
According to a statement released by Devas, Antrix stopped performing in good faith under the Devas Agreement in 2010. In February, 2011, Antrix issued a letter to Devas stating that it was terminating the Devas Agreement due to a purported policy decision of the central government acting in its sovereign capacity.
The case was filed in 2015 after the UPA government annulled the contract between Antrix and Devas in August 2011.
In May 2016, former ISRO Chairman G Madhavan Nair was questioned by the Central Bureau of Investigation (CBI) in relation to the case.
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