Antrix loses satellite case appeal against Devas, a second time

Antrix Corp, the commercial arm of India’s space agency Isro, has lost a case for the second time in an international tribunal over cancelling a deal with Devas Multimedia, a satellite firm backed by Deutsche Telekom and two US investors.

On Monday, the Permanent Case of Arbitration at The Hague found India had breached its treaty with Mauritius to accord equitable treatment to foreign investors.

India had cancelled the deal with Devas to lease two satellites to beam high-speed internet to smartphones on the S band in 2011, stating it would use spectrum in the band for strategic purposes.

Deutsche Telekom had invested $75 million in Devas in 2008 for a 17 per cent stake in the company. US-based Columbia Capital and Telcom Ventures are the other investors that had invested in Devas through Mauritius.

Antrix had signed an agreement with Devas to lease the two satellites in 2005, but was caught in the political storm that erupted over the 2G telecom scam.

In September 2015, the International Court of Arbitration had asked Antrix to pay $672 million (~4,400 crore) to Devas for cancelling the deal. Devas is also fighting a case based on the verdict in the Delhi High Court.

The department of space (DoS) on Tuesday said the latest verdict would limit the compensation liability to 40 per cent of the value of the investment but did not quantify the amount.

Devas said the tribunal was yet to award damages and added it would prefer a dialogue to resolve the issue, failing which it would continue to press its claims before international tribunals.

“With today’s award, two international tribunals have agreed that financial compensation should be paid after the annulment of Devas’ rights,” Devas Chairman Lawrence Babbio, former vicechairman of Verizon, the largest telecommunications company in the US, said in a statement.

The PCA found India breached its treaty with Mauritius to accord fair and equitable treatment to Devas' foreign investors. However, it upheld India's security interest provisions in the treaty, the DoS said in a statement.

The PCA administers cases involving states, including investment treaty claims brought under arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL).

“The government reiterates it invoked essential security interests through a Cabinet Committee on Security decision. The award of the tribunal is being examined and legal recourse will be taken. We remain committed to our strategic security interests in this matter,” Isro said in a statement.

On Monday, the Enforcement Directorate issued a notice to Devas for violation of foreign exchange rules while investigating another case of alleged money laundering. The Central Bureau of Investigation is also probing Devas, its executives and a few Isro officials.