Devas- ISRO’s Antrix Corporation Deal

• 07 Nov 2023

Source: IE

Why in News?

The district court of The Hague, Netherlands, rejected India's request to cancel a USD 111 million compensation award to foreign investors in Devas Multimedia.

• The payment was awarded by the United Nations Commission on International Trade Law (UNCITRAL) tribunal because a satellite deal from 2005 with India's ISRO's Antrix Corporation and Devas Multimedia was cancelled in 2011.
• The Court of Netherlands refused to overturn the award, finding the Indian government liable for improperly terminating the deal.

What is the Case of the Devas-Antrix Deal?

• The 2005 Devas-ISRO Satellite Deal:
  • In 2005, Antrix Corporation, the commercial arm of the Indian Space Research Organisation (ISRO), entered a satellite deal with Devas Multimedia, a Bengaluru start-up.
    • The deal involved leasing the S-band on ISRO satellites, GSAT-6 and GSAT-6A, for 12 years to provide digital multimedia services.

Note

• The S-band is a designation for a part of the microwave band of the electromagnetic spectrum.
• The S-band is used for Satellite communication, Radar, Supplying vital real-time data, and High resilience to rain fade and other environmental interference.
• The S-band is used by the shipping, aviation, and space industries. The S-band spectrum is also extremely valuable for mobile broadband services.
• GSAT-6 and GSAT-6A are high-power S-band communication satellites.

• Cancellation of the Satellite Deal:
  • In 2011, the Indian government abruptly cancelled the deal, citing national security reasons.
    • The decision was taken in the midst of the 2G scam and allegations that the Devas deal involved the handing over of a communication spectrum valued at nearly Rs 2 lakh crore for a pittance.
• Legal Battles and Compensation Awards:
  • Foreign investors in Devas Multimedia, pursued compensation through international tribunals.
    • In 2015, the International Chamber of Commerce (ICC) arbitration tribunal, awarded Devas Multimedia USD 1.2 billion in compensation.
      • Deutsche Telekom received USD 101 million from the Permanent Court of Arbitration in Geneva.
      • In 2020, three Mauritius-based investors were granted USD 111 million by UNCITRAL.
  • Due to the Indian Government not paying the compensation, Devas filed an appeal in the US and EU to liquidate assets of Indian Public Sector Undertaking (PSUs) for recovery of penalty.
• Indian Government's Challenge:
  • In 2022, the Indian government challenged the compensation awards, citing a Supreme Court of India order that upheld Devas Multimedia's liquidation on fraud charges.
    • The Enforcement Directorate and the Central Bureau of Investigation are currently pursuing cases of money laundering and corruption in India against Devas and its officials.
• The Hague District Court's Rejection:
  • The district court in Hague rejected India's plea to set aside the compensation awards.
  • It ruled that charges of deceit, fraud, and corruption had already been addressed and dismissed during earlier legal proceedings.
  • The Supreme Court of India's judgment was deemed to hold no independent significance.

International Chamber of Commerce (ICC)

• ICC is the world’s largest business organization working to promote international trade and responsible business conduct.
• It has been helping to resolve difficulties in international commercial and business disputes to support trade and investment since 1923.
• ICC headquarters is in Paris, France.