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What is the news?
The Supreme Court has upheld the liquidation of Devas, whose foreign investors continue to fight for compensation following the cancelled 2005 satellite deal with Antrix. The Supreme Court has kept the $1.2 billion award in suspension.
What is Devas- Antrix deal?
Devas entered into a lease contract with ISRO’s private sector arm Antrix Corporation in 2005. According to the deal, ISRO would lease two satellites GSAT-6 and 6A to Devas for 12 years. Devas was supposed to provide multimedia services to cell phones in India using the S-band spectrum, with ISRO leasing 70 MHz of the S-band spectrum.
The deal was terminated on February 25, 2011, by the government citing “security reasons“.
What happened after the termination of the deal?
After the termination, Devas and its foreign investors approached various international tribunals and courts seeking compensation. This led to arbitration between Antrix and Devas at the International Chambers of Commerce (ICC) and two bilateral investment treaty (BIT) arbitrations.
India lost all three disputes. Devas was awarded compensation of $1.2 billion by an International Chamber of Commerce tribunal in 2015. Apart from that,
– Deutsche Telekom was awarded $101 million-plus interest by the Permanent Court of Arbitration in Geneva in 2020.
– Mauritius investors were awarded $111 million by the UN Commission on International Trade Law tribunal in 2020.
– The German investors claimed compensation for violation of an India-Germany bilateral investment treaty and the Mauritius investors for an India-Mauritius BIT.
What steps are performed by India?
In 2014, the Indian government allocated the case to CBI to look into the 2005 deal. It highlighted the misuse of official positions for their own benefits. The Enforcement Directorate also filed a charge sheet in 2018 under the Prevention of Money Laundering Act against a former managing director of Antrix and five Devas officials for corruption.
Source: This post is based on the article “Explained: The Devas-Antrix deal and its aftermath” published in the Indian Express on 19th January 2022.