Canadian Court Allows Devas Investors To Seize Funds Collected by IATA from AAI and Air India: Reports
Moneylife Digital Team 06 January 2022
A law court in Montreal district of Canada has allowed three Mauritius-based investors of Devas Multimedia Pvt Ltd, a joint venture between the Indian government-owned Antrix Corporation and Devas Multimedia Ltd, to seize funds deposited by Airport Authority of India (AAI) and Air India with International Air Transport Association (IATA). According to media reports, the court on 21 December 2021 had issued the order for ordering preliminary attachment of $6.8 million of the AAI funds deposited as air service fees with the Montreal-based IATA.
 
"The three investors—Devas (Mauritius) Ltd, Telcom Devas Mauritius Ltd and Devas Employees Mauritius Pvt. Ltd—have won international arbitration awards in their dispute with Antrix Ltd and the Indian government. AAI and Air India are being targeted because they are Indian public sector entities with overseas assets and serve as a proxy for the government of India," says a report from Mint
 
According to the report, the Canadian court in Montreal passed separate orders on 24th November and 21 December 2021 on pleas by shareholders of Devas Multimedia Pvt Ltd to enforce arbitration awards against the Indian government.
 
After the order was issued on 21st December, Air India removed its inventory from global distribution systems (GDS), used by travel agents to issue tickets, it added.
 
AAI says it would take legal recourse against the order by a court in Canada. “The AAI has not been served any order by the Quebec Court, Canada, in this matter. However, the IATA shared certain documents on the AAI’s request, for suspending the transfer of the amount collected on behalf of the AAI. The AAI is taking legal recourse to defend itself,” the Airports Authority says in a statement.
 
According to a report from Indian Express, besides the Montreal court, the investors had moved a federal court in the US which, on Monday, turned down their plea to identify assets of Antrix across America. After the investors said Antrix had no assets in the Washington district, as they had been directed by the federal court for the Western district of Washington to find earlier, it told them to identify Antrix assets in the US eastern district of Virginia, it added.
 
Devas Multimedia is also seeking over $1.2 billion from India it won in international arbitration in September 2017. In 2020, an arbitration tribunal had awarded more than $111 million along with interest to Devas. The company also won $562.5 million in damages from separate proceedings at the International Chamber of Commerce.
 
This dispute goes back to 2011, when Antrix Corp, a unit of Indian Space Research Organization (ISRO) annulled an agreement with Devas Multimedia citing force majeure (unforeseeable circumstances that prevent someone from fulfilling a contract).  
 
The then United Progressive Alliance (UPA) government cancelled the controversial Devas-Antrix contract in February 2011, invoking sovereignty and decided to use the advanced satellite (GSAT-6) for the country's strategic use.
 
Under the annulled deal, Antrix was to lease transponders of the satellite to Devas for allowing it to offer digital multimedia services using the S-band wavelength (spectrum), reserved for strategic purposes.  
 
 After the cancellation of the deal, Deutsche Telekom, three Mauritius-based foreign investors in Devas Multimedia, and Devas Multimedia itself, approached various international arbitration tribunals seeking damages from the Indian government. 
 
Antrix Corp has also initiated proceedings to liquidate Devas Multimedia alleging that the company was a sham entity. The matter is currently pending before the Karnataka High Court.
 
Comments
david.rasquinha
4 months ago
The sovereign needs to learn, the hard way if necessary, that it is as much subject to the rule of law as its citizens, real and artificial.
hari.krv
4 months ago
How can a sovereign be humiliated in this way? Is there no limit to bureaucratic bungling?
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