Antrix case : Devas moves US court to enforce The Hague arbitration award

BusinessLine | 15 January 2021

Antrix case : Devas moves US court to enforce The Hague arbitration award

Devas Multimedia has filed a petition at a US district court seeking to enforce the damages awarded against ISRO’s commercial arm Antrix Corp by the Permanent Court of Arbitration Tribunal at The Hague.

The petition, filed by three investment firms related to Devas, argues that the award can be enforced in the US because India is a signatory to the New York Convention.

“By entering into the New York Convention, India waived any immunity it may otherwise possess in relation to an action to enforce an award in this jurisdiction,” states the petition filed by three Mauritius-incorporated companies — CC/Devas (Mauritius) Ltd, Devas Employees Mauritius Private Ltd, and Telcom Devas Mauritius Ltd.

Devas also alleged that Indian agencies, including the Enforcement Directorate and the Central Bureau of Investigation, were targeting the company and its officials to thwart its efforts to get the arbitration award enforced.

“In early January 2017, India (through the ED) froze the bank accounts and mutual funds in India of Devas and several of its personnel. India’s actions plainly were intended to financially cripple the ability of Devas to defend itself from the continued harassment by India,” the petition stated.

“On January 30, 2019, the ED – without having heard Devas, its investors, or its present and former directors/officers – purported to issue a penalty order of approximately $220 million against Devas, its investors (including petitioners), and present and former directors/officers,” it added.

The Hague ruling

In 2016, the Permanent Court of Arbitration Tribunal at The Hague had ruled against India’s decision to scrap the satellite deal with Devas Multimedia Private Ltd. Devas had challenged Antrix’s decision to cancel a 2005 contract for building two satellites for Devas, citing alleged irregularities in the deal. It was not until July 2, 2010 — weeks after BusinessLine revealed the nature of the deal — that the Space Commission was briefed on the agreement.

The decision to annul the contract was backed by the then UPA government. Following Devas’ challenge in 2020, the tribunal issued the Quantum Award, ordering India to pay Devas damages totalling $111 million plus interest at LIBOR plus 2 per cent as and from February 17, 2011, together with attorney’s fees, and post-award interest on all such sums.

The fresh petition from Devas comes after it tasted victory in a parallel case. In October 2020, the US federal court for the Western District of Washington, asked Antrix Corporation to pay $1.1 billion to Devas Multimedia as per the 2015 arbitration award of the International Chamber of Commerce.

Antrix had questioned the jurisdiction of the US court in the case. But the US court rejected Antrix’s objection stating that while foreign entities are generally “immune from the jurisdiction of the courts of the US,” there is an exception when a party seeks to confirm an arbitral award against the foreign state that is “governed by a treaty or other international agreement in force for the US calling for the recognition and enforcement of arbitral awards.” Even though India has challenged this order at the US Court of Appeals, Devas wants to now enforce the award given by the court in The Hague

source: BusinessLine