Failed 2005 satellite deal: ISRO arm Antrix opposes move by Devas investors to discover its assets across US

The US federal court for the western district of Washington allowed the Devas investors to discover Antrix assets in the region through an August 16, 2021 order. The foreign investors are now trying to obtain orders to make it a nationwide discovery of assets instead of the Washington region.

Devas Multimedia, which is up for liquidation following a May 25 order of the National Company Law Tribunal in India has also, in court filings on November 29, opposed the move by Mauritius investors in Devas Multimedia to make the US federal court judgment for the discovery of Antrix Corp assets applicable across the US.

The Mauritius-based investors in Devas Multimedia – CC/Devas Mauritius, Telcom Devas Mauritius and Devas Employees Mauritius Pvt Ltd – have moved the US federal court for the western district of Washington to register an August 16 order of the court – allowing the investors to find assets of Antrix in Washington – across the US.

In its counter to the plea by the Devas Multimedia investors, Antrix Corporation and Devas Multimedia have, in filings on November 29, said that the investors cannot claim a portion of the $1.2 billion compensation awarded to Devas Multimedia by an international tribunal.

“Given that intervenors have identified no assets in the state of Washington, they cannot rely on this court’s ruling on Washington state law to support their motion to register the judgment in jurisdictions where Washington state law will not apply,” Antrix has said in a court filing.

Antrix has said that only two US companies – Intelsat Service and Equipment LLC and Yazmi USA LLC owes the ISRO commercial arm any dues that would be of interest to Devas investors.

‘Intelsat owes Antrix less than $150,000. Intelsat filed for bankruptcy in May 2020, and those bankruptcy proceedings are pending in the US Bankruptcy Court for the Eastern District of Virginia. Yazmi owes Antrix less than $40,000. Aside from $186,304 owed by these two companies, the record reflects that Antrix does not have any assets in the United States,” Antrix has stated.

“Antrix submitted months ago that it does not own substantial assets anywhere in the United States, and intervenors have not submitted any evidence to refute that assertion. Therefore, this court should deny intervenors’ motion for nationwide registration,” the ISRO commercial arm has said.

The investors “do not have the standing to enforce Devas’s judgment. Both the judgment and the underlying award were entered in the name of Devas, not the intervenors,” says the Antrix plea.

Devas Multimedia, in its opposition to the investors’ move to discover Antrix assets across the US, has stated that the investors were making an “attempt to usurp Devas’s exclusive right to the judgment” issued by the court and “to circumvent the authority of the court-appointed liquidator”.

Meanwhile, in a separate development in another US federal court in the southern district of New York, the Indian public sector aircraft carrier Air India – which is being bought by the Tata Group – has opposed a move by the Devas Multimedia investors to expedite the identification of Air India as an alter ego of the Government of India on account of the privatisation of Air India. Devas investors are seeking to identify Air India as an alter ego of GoI to enforce the compensation awarded by an international tribunal over the failed 2005 Antrix-Devas deal.

Under the failed 2005 deal, the ISRO was supposed to lease two communication satellites for 12 years at Rs 167 crore to Devas Multimedia. The startup firm was to provide multimedia services to mobile platforms in India using the space band or S-band spectrum transponders on ISRO’s GSAT 6 and 6A satellites built at Rs 766 crore by ISRO.

The deal was annulled by the UPA government in February 2011 amid the 2G crisis by citing the requirement of the S-band spectrum for the security needs of the country. After the NDA government came to power in 2014, the CBI and ED were asked to investigate the deal.

After the cancellation of the deal, foreign investors in Devas Multimedia – the German telecom major Deutsche Telekom, the three Mauritius-based investors and Devas Multimedia approached various international tribunals seeking damages for the failed deal.

Deutsche Telekom was awarded a $101 million compensation by the Permanent Court of Arbitration in Geneva, the Mauritius investors were awarded $111 million by the United Nations Commission on International Trade Law tribunal and Devas Multimedia was awarded $1.2 billion by an International Chamber of Commerce tribunal on September 14, 2017.

The $ 1.2 billion compensation award to Devas Multimedia was confirmed by the US federal court for the western district of Washington on October 27, 2020. Antrix Corporation has gone in appeal to a US court against this order and the Supreme Court of India has asked for the ICC tribunal award to be kept in abeyance through a November 4, 2020 order.

The Enforcement Directorate and the Central Bureau of Investigation in India are pursuing cases of money laundering and corruption in the country against Devas. The National Company Law Tribunal ordered the liquidation of Devas Multimedia on May 25 this year citing fraudulence in its creation.