Mauritius-based entities Devas Limited, Telcom Devas Mauritius and Devas Employees have now written to the Indian government with an offer to settle the dispute it has with India amicably. Bengaluru-based Devas Multimedia is owned by the three Mauritius-based entities, which has been in a long drawn-out battle with Indian government-owned Antrix, ISRO’s commercial arm. The dispute pertains to a satellite leasing contract that was cancelled. The letter, addressed to Prime Minister Narendra Modi as well as the Union Ministers for External Affairs, Law and Justice and Home Affairs, stated that the Devas entities wished to work towards an amicable solution and requested a meeting.
Devas Multimedia had filed a case against Antrix for damages it suffered due to the cancellation of the agreement to use two satellites (GSAT-6 and GSAT-6A) for high-speed beaming of video content on mobile devices on the S-band spectrum in February 2011.
The two companies had entered into an agreement in 2005. The UPA government cancelled the controversial contract in February 2011, invoking sovereignty in the event of force majeure and decided to use the advanced satellites (GSAT-6 and GSAT-6A) for the country's strategic use. Devas disputed Antrix’s cancellation of the agreement and in June 2011, commenced arbitration proceedings under the Rules of Arbitration of the International Chamber of Commerce.
In its letter to the Union government earlier this month, the Devas entities want to enforce the sum awarded to them in an international arbitration tribunal, further confirmed by the US District Court for the Western District of Washington. The International Chamber of Commerce awarded Devas $562.5 million plus interest in the arbitration. The US court put this at $1.3 billion including interest.
In addition to the ICC award, Devas is also seeking confirmation of another award under the rules of the United Nations Commission on International Trade Law (UNCITRAL). The tribunal awarded Devas $110 million plus interest in October last year. Devas said it is seeking confirmation of the same at the US District Court for the District of Columbia and in other fora around the world.
“The investors prefer to resolve this dispute amicably. To this end, the investors emphasise their willingness to work towards a mutually acceptable resolution, and request a meeting with you, or appropriate representatives of the government of India. Please let us know when you are available to engage in these discussions, and we would be pleased to facilitate such a meeting,” the letter to the Union government said.
The letter gave the Union government two weeks to respond, following which it said the companies “reserve their rights to initiate arbitration under the BIT (Bilateral Investment Treaty) immediately, on the assumption that India does not wish to engage in negotiations with the investors to resolve this matter amicably”.
“India’s ability to attract foreign investors is contingent on the Indian government’s respect for international arbitration judgements and the rule of law. By evading payment of the US$1.5 billion owed to Devas, its shareholders and investors, the Indian government is harming India’s international standing,” a Devas Multimedia spokesperson said.
Earlier this year, the National Company Law Tribunal admitted a petition filed by Antrix to wind up Devas Multimedia and appointed a provisional liquidator. The tribunal also directed the existing management of Devas Multimedia to extend full cooperation to the provisional liquidator appointed by it.
Matthew D McGill of Gibson Dunn & Crutcher LLP, lead counsel for a number of the shareholders of Devas, called the NCLT proceedings an "obvious sham". "We will appeal, in the hope that India’s judiciary will restore and vindicate the principle— well-established in India—that the rule of law is greater than the rule of any man. The Indian government should fulfil its internationally recognized obligations if it wants to become the $5 trillion economic juggernaut as articulated by Prime Minister Modi,” he said.
With inputs from agencies