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Devas-Antrix deal: Tribunal rules against Indian govt

by Anuj KumarJuly 26, 2016

The international tribunal of arbitration in The Hague has ruled against Antrix Corporation, the commercial arm of India’s space organisation, in the ongoing case with Devas Corporation over sharing of spectrum on satellites. With this, India may likely have to fork out $1 billion as compensation to Devas.

The ruling, issued on Monday at The Hague, was the second by an international tribunal arising out of the cancellation of the Devas-Antrix contract.

“A Permanent Court of Arbitration (PCA) tribunal has found that the Government of India’s actions in annulling a contract between Devas and Antrix Corporation Ltd. and denying Devas commercial use of S-band spectrum constituted an expropriation,” Devas said in a statement on Tuesday.

The statement further stated that the PCA tribunal unanimously found that by annulling the contract in 2011 and denying the commercial use of S-band spectrum, the Indian Government expropriated the investments of Devas’s foreign shareholders and also acted unfairly and inequitably, thus making it liable to pay financial compensation.

PCA administers cases under the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL).

In 2015 the International Chamber of Commerce (ICC) tribunal ruled that the Antrix’s annulation of the Devas-Antrix contract was unlawful and awarded Devas damages and pre-award interest of approximately $672 million, plus post-award annual interest accruing at 18 per cent until the award is paid in full.

Courts in the United Kingdom and France have recognized the ICC award and held that it is enforceable, Devas’s statement noted.

Antrix is the commercial arm of the Indian Space Research organisation (ISRO) set up in 1992 for consultancy and marketing activities by leveraging ISRO’s to get a hold in the fast growing commercial space market. Devas Multimedia, based in Bangalore, was set up by former ISRO scientists and some U.S. investors. According to Devas website investors included Deutsche Telekom AG, Columbia Capital LLC, and Telcom Ventures LLC.

In 2005 Antrix and Devas entered into an agreement for the long-term lease of two ISRO satellites operating in the S-band. The deal was for 70 MHz of S-Band frequency used to provide multimedia services by leasing most of the transponders on the GSAT-6 and GSAT-6A satellites for 12 years. Devas was to pay $300 million over the said period.

However, after reports of unilateral process and presumptive loss to exchequer due to the deal then UPA government annulled the contract in August 2011. Following this the U.S. investors in Devas moved a case against Antrix.

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Anuj Kumar

Founder & Editor-in-Chief at Legal Desire Media & Publications
Anuj is Founder & Editor-in-Chief at Legal Desire Media & Publications
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Anuj Kumar
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