Seattle District Court Directs ISRO’s Commercial Arm ‘Antrix’ To Compensate $1.2 Billion To Bangalore’s Devas Multimedia
The U.S. court has asked the commercial arm of Indian Space Research Organisation’s Antrix Corporation to pay compensation of $1.2 billion to Devas Multimedia (Bengaluru-based startup) for calling off a satellite deal in 2005.
New Delhi, India: On October 27, district judge Thomas S Zilly of the district court for the Western district of Seattle, Washington in the United States directed Antrix, the commercial arm of Indian Space Research Organisation (ISRO) to pay 1.2$ Billion to a Bengaluru based firm named Devas Multimedia Corporation. The amount includes the principle sum of 562.5$ Million along with interest of 638$ million.
The amount arises from an agreement between the two parties in January 2005, wherein Antrix agreed to build, launch and operate two satellites (GSAT6 and GSAT 6A) for the firm along with providing a 70MHz of a S-band spectrum which was planned by Devas Multimedia to be used for offering hybrid satellite and terrestrial communication services throughout India.
However, Antrix terminated the agreement in February 2011, in the backdrop of the 2G scam in the telecom sector and allegations of a sweetheart deal in the allocation of S-band spectrum to a fledgling firm. Thereafter, Devas Multimedia approached several legal avenues in India, and even international bodies like the International Chamber of Commerce (ICC). Antrix refused to participate in the proceedings of the ICC, by virtue of obtaining an injunction from the Supreme Court enjoining the arbitration to proceed, however, in 2014 the court did lift the injunction and allowed the parties to approach tribunals.
In 2018, Devas Multimedia decided to approach the US District court in Seattle claiming that the court has competent jurisdiction because Antrix engages in business in this district and in the whole of the United States. The judges agreed to this point, but stayed the matter for over a year and asked the two to file a joint status report by April 15, 2020.
Devas Multimedia said that three separate international tribunals and nine different arbitrators have found the termination of the Devas-Antrix agreement to have been wrongful, with one of the tribunals describing it as “conduct ”which shocks, or at least surprises, a sense of juridical propriety,” and another finding it to be “a clear breach of simple good faith” by India.
After considering submissions from both parties, the district court on September 17 removed the stay on the plea of Devas Multimedia to enforce the compensation payment sought from the Indian government over the failed deal — by citing a lack of progress in cases in courts in India and granted the arbitral award and Devdas finally won the 9 year old legal battle.
Antrix Corporation Limited is a wholly owned Government of India Company under the administrative control of the Department of Space. Antrix Corporation Limited was incorporated as a private limited company owned by Government of India in September 1992 as a Marketing arm of ISRO for promotion and commercial exploitation of space products, technical consultancy services and transfer of technologies developed by ISRO. Another major objective is to facilitate development of space related industrial capabilities in India.
Devas Multimedia Corporation is a private firm based in Bangalore which was started by former ISRO and World Space employees in the year 2004. Devas has led indigenous innovation in the arena of satellite communications and technologies to build a national satellite system that provides vital services to the masses and government agencies across India.