A Canadian court found that the Airports Authority of India is inseparable from India "or is the alter ego of India", according to Devas.

Atom Arbitration Tuesday, January 04, 2022 - 19:21

In an update in the Antrix-Devas case, Devas said on Tuesday, January 4 that its shareholders were allowed to seize assets of the Airports Authority in India (AAI) by a court in Canada. In a statement on Monday, a spokesperson of Devas Multimedia said an amount of over $30 million, which was held by global airlines body IATA on behalf of the AAI, was seized by Devas Multimedia's shareholders following a Canadian court order.

The Devas Multimedia spokesperson said the company's shareholders sought the right to seize all sums or moveable property of India "and/or AAI...being held by IATA" either at its head office in Montreal or at any of its worldwide branches "on behalf of India and/or AAI".

"Devas' shareholders have been granted the right to garnish property belonging to AAI held by IATA in Montreal," the company spokesperson added. This novel enforcement strategy requires the IATA to garnish, amongst other things, the air navigation charges and the aerodrome charges held by it either at its head office in Montreal or at any of its branches worldwide, the spokesperson mentioned.

On October 27, 2020, a US court had asked Antrix Corporation, the commercial arm of the Indian Space Research Organisation (ISRO), to pay a compensation of $1.2 billion to Devas Multimedia, a Bengaluru-based startup, for cancelling a satellite deal in 2011.

According to the company spokesperson, more than $30 million have been seized till date under the IATA action. The IATA assists the AAI in collecting charges such as air navigation charges from foreign airlines. The Canadian court found that "AAI is India, insofar as it is an organ of the State of India inseparable from India or is the alter ego of India", according to the company.

Matthew D McGill, a partner at Gibson, Dunn & Crutcher, and the lead counsel for several shareholders of Devas Multimedia, said, "We will pursue the Indian government in courts worldwide to ensure the debts owed to Devas are satisfied. Our action in Canada has resulted in millions of dollars garnished by Devas shareholders and represents the first fruits of a globally-focussed effort to be paid."

“Devas shareholders have been clear from the start: Despite state-sponsored investigations intended to intimidate and scare-off the victims of India’s unlawful acts, we will continue to pursue Indian government’s assets to satisfy the awards, while remaining open to an amicable settlement,” he added.

A statement by Devas shareholders senior advisor Jay Newman stated: “Devas will find Indian government assets, and Devas will seize them until the debts are paid. Using a kangaroo court like the NCLT to expropriate and liquidate Devas to prevent it from “enforcing the ICC Award” was a desperate move. Using government agencies to launch bogus criminal investigations against Devas will be seen around the world for what it is – an Indian government willing to debase the country’s reputation by lashing out at its victims rather than paying what it owes them.” 

According to an agreement signed in January 2005, Antrix agreed to build, launch and operate two satellites and to make available 70 MHz of S-band spectrum to Devas, which the latter planned to use to offer hybrid satellite and terrestrial communication services throughout India.

The agreement was terminated by Antrix in February 2011. In June 2011, Devas commenced arbitration proceedings under the Rules of Arbitration of the International Chamber of Commerce.

In September 2015, the arbitration tribunal asked the commercial arm of ISRO to pay $672 million.

In his order dated October 27, 2020, Judge Thomas S Zilly, US District Judge, Western District of Washington, Seattle, asked Antrix Corporation to pay a compensation of $562.5 million to Devas Multimedia Corporation and the related interest rate, amounting to a total of $1.2 billion.

Read: US court directs ISRO arm Antrix to pay $1.2 bn to Bengaluru startup for cancelling deal

The Airports Authority of India (AAI) on Tuesday, January 4, said it is taking legal recourse to defend itself from a Canadian court order that has allowed Devas Multimedia's shareholders to seize an amount of over #30 million of the AAI held by the International Air Transport Association (IATA).

In a statement, a spokesperson of the AAI said: "AAI has not been served any order by the Quebec Court, Canada in this matter. However, IATA shared certain documents on AAI's request for suspending the transfer of amount collected on behalf of AAI."

"AAI is taking legal recourse to defend itself from the impugned order," the spokesperson added.

With inputs from PTI

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