Antrix vs Devas legal case rages on
August 2, 2019
India’s Central Bureau of Investigations (CBI) has already brought criminal actions against a number of former ISRO/Antrix staff in connection with alleged corruption between ISRO and Antrix. Antrix was the commercial arm of India’s State Research Organisation which supplies and controls all satellite active over India.
In 2005 Bangalore-based Devas Multimedia quite legitimately entered into a contract with Antrix whereby Antrix would use ISRO to build and launch two satellites and lease 70 MHz of S-band spectrum to Devas to offer broadband services across India. Devas was to pay $300 million to Antrix over a 12-year period.
There was considerable fall-out following the cancellation of the deal by the Indian government. Devas sued, and won, and achieved International Chamber of Commerce Arbitration tribunal victories which – in summary – awarded overall damages of around $1 billion ($672 million plus interest at 18 per cent annually). That sum has grown to an estimated $1.6 billion.
However, Devas wasn’t off the hook because the Indian government accused Devas of breaching the country’s Foreign Exchange Management Act (FEMA) and a massive fine levied by the Enforcement Directorate.
It wasn’t just Devas which sued. Deutsche Telekom (because they were investors in Devas) sued Antrix in September 2013. A ruling in December 2018 a Tribunal found that India had breached the “fair and equitable treatment standard” provided by a Germany-India bilateral trade agreement.
Subsequently India commenced an action in a US Federal Court (in Washington state) and where Devas requested a $1.1 billion bond be placed into the court by Antrix. The court said a bond need not be paid. Antrix is arguing with a counter-claim saying that Devas does not come under US law or jurisdiction. Antrix also pointed out that it is pursuing Devas through the Indian court system.
The US court has ruled that Devas can sue under US law, although ‘stayed’ both actions for 12 months (to April 2020) to allow India legal actions to end.
“Antrix is subject to this Court’s personal jurisdiction pursuant to the Foreign Sovereign Immunities Act (FSIA),’’ the Washington court ruled, while refusing to throw out the case on the grounds of lack of jurisdiction. “The Court exercises its discretion to stay this action pursuant to Article VI of the New York Convention pending the resolution of Antrix’s challenge to the underlying award in India’s courts,’’ Judge Thomas S Zilly noted.