India asks US Supreme Court to respect comity of nations in Antrix-Devas dispute over failed satellite deal

The US Court of Appeals for the Ninth Circuit ruled on August 1, 2023 that Antrix Corp, as an alter ego of India, must have some amount of business in the US to be subjected to the jurisdiction of US courts under the Foreign Sovereign Immunities Act of the US.

A decision by the US SC to uphold the August 1, 2023, order of the appeals court “will mean that comity is extended to this case and India need not further defend the fairness and sanctity of its courts’ decisions”, states the written submission for the Republic of India.

The US SC allowed oral arguments on Monday in a plea filed by foreign investors in Devas Multimedia who are seeking an over ruling of the US appeals court decision to cancel confirmation of a $1.2bn compensation award (with interest) made by a tribunal of the International Chamber of Commerce on September 14, 2015, in favour of Devas Multimedia.

When the oral arguments in the dispute over the $1.2 billion arbitration award were allowed by a bench of the US Supreme Court on Monday, the counsel for Antrix argued that the case “serves as an irritant to the Indian government”.

Carter G Philips said during the oral arguments that the Antrix Devas agreement of 2005, which was cancelled for security reasons during the tenure of the UPA government in 2011, did not have any US interests or anything “that remotely affects either interstate or foreign commerce”.

The Antrix Corp counsel argued that only courts in India could deal with the matter according to the original agreement and that the Supreme Court of India had already set aside the ICC arbitration award in favour of Devas Multimedia.

“If you want to know where the problems of foreign relations arise, read the Government of India’s brief. It tells you that this kind of disrespect to an Indian court and this kind of disrespect in terms of intruding into the relationship between the State of India—the Government of India and its state-owned enterprise to find out what assets are being done and who’s doing what with whom, those are the reasons why the Court should not be enforcing this kind of award under these kinds of circumstances,” the Antrix counsel argued.

The acting solicitor-general for the US Department of Justice, Sarah M Harris, who argued as an amicus curiae on behalf of the US investors in Devas Multimedia in the US SC on Monday, said the US appeals court had erred in ruling that a foreign entity like Antrix Corp should have some minimum contacts in terms of business in the US to be subject to US courts.

She said that the US Foreign Sovereign Immunities Act “says when personal jurisdiction over a foreign state shall exist and omits any minimum contacts requirement. That is all this Court needs to hold to reverse. The Ninth Circuit’s contrary statutory holding disregards that text, and no one, even Respondent, appears to defend it”.

The counsel for Mauritius investors in Devas Multimedia, Mathew D McGill, told the US SC that a decision to reverse the US appeals court order of August 1, 2023, would allow Devas investors to seize properties linked to Antrix Corp and India in the US to claim compensation.

The counsel for the investors argued that if the US SC “vacates the decision of the Ninth Circuit, that would have the effect of restoring the judgment of the district court. So we would, indeed, have an enforceable judgment at that time. And, as the district court held, Antrix is the alter ego of India, so we could seize not only Antrix’s assets but any of those of India that the Foreign Sovereign Immunities Act would allow”.

The US appeals court for the ninth circuit ruled on August 1, 2023 that Antrix Corp enjoyed immunity under the Foreign Sovereign Immunities Act from arbitration awards since it did not have a sizeable presence in the US.

Following the filing of the case in the US SC against the appeals court order by Devas Multimedia investors, several business bodies like the US Council for International Business, the Chamber of Commerce of the USA and the American Petroleum Institute have supported the stand of the investors in Devas Multimedia—that an enterprise does not require to have business interests in the US for federal courts to confirm international arbitration awards.

The foreign investors in Devas and some of the amicus curiae who have placed written submissions favouring the Devas investors have argued that the 2005 Antrix Devas agreement was subject to international agreements like the New York Convention, which allows arbitration awards to be confirmed in the US.

Devas investors plea in the US SC

On October 4, 2024, the US Supreme Court allowed the pleas filed by the foreign investors in the Bengaluru based satellite communication start-up Devas Multimedia for a “Writ of Certiorari” hearing against the order of the appeals court which favoured Antrix Corp.

The US SC has framed the question it has to answer in the pleas by the foreign investors as “Whether plaintiffs must prove minimum contacts before federal courts may assert personal jurisdiction over foreign states sued under the Foreign Sovereign Immunities Act (FSIA)”.

The foreign investors filed the petition for a “Writ of Certiorari” in May 2024 against a February 6, 2024, order of the US Court of Appeals for the Ninth Circuit which refused a rehearing into its August 1, 2023.

The foreign investors of Devas Multimedia who have approached the US Supreme Court are CC/Devas (Mauritius) Limited; Devas Multimedia America Inc; Devas Employes Mauritius Private Limited; and Telcom Devas Mauritius Limited.

On August 1, 2023, the US appeals court for the ninth circuit had ruled that a US district court “erred in exercising personal jurisdiction over Antrix Corp. Ltd., an Indian corporation, under the Foreign Sovereign Immunities Act, because plaintiff (Devas) failed to establish that Antrix had the requisite minimum contacts for personal jurisdiction”.

The August 1, 2023, order was a major relief for Antrix Corp and the Indian government, which is fighting legal battles all over the world in connection with a 2011 decision of the UPA government to annul a satellite deal inked in 2005 by Devas Multimedia and Antrix for the launch of satellite digital multimedia services using the S-band spectrum. The services were to be akin to the satellite internet services currently proposed in India.

The foreign investors have stated in their petition in the US SC that the court “should grant certiorari and confirm that no minimum contacts analysis is required for foreign states sued under the FSIA”.

The Ninth Circuit court’s order that a foreign entity must have minimum contact or presence in the US to be liable to suits “undermines (the US) Congress’s goal of creating a uniform body of law concerning the amenability of a foreign sovereign to suit in United States courts,” the foreign investors in Devas Multimedia have argued.

Antrix filings in US Supreme Court

The state-owned Antrix Corporation, which markets services of Isro, stated earlier in the US SC that it is a company owned by the Government of India and is entitled to rights accorded to foreign corporations in the US in legal disputes.

In a filing on August 6, 2024, the company argued that “Antrix is a state-owned corporation, not a foreign government. There is no need to consider whether foreign states are entitled to due process protections, either as a matter of statutory text or constitutional right, if Antrix—as a foreign corporation—is entitled to such protections anyway”.

“Antrix is a private Indian company owned by the Government of India. Antrix has provided space-related services since its incorporation in 1992, but Antrix is not an agent of the Indian Department of Space or the Indian Space Research Organization,” the response said.

Antrix has stated that its identity as a foreign corporation and not a foreign sovereign entity was not addressed by the US appeals court as well and the company is “entitled to due process even when they are not entitled to sovereign immunity under the FSIA”.

The Indian space firm has argued that it has no business interests in the US and as a consequence the US courts cannot review and overrule a final judgment of the Supreme Court of India which upheld the setting aside of the $1.2 bn International Chamber of Commerce award in January 2022.

Antrix has argued that “there is no longer an award to enforce because the Delhi High Court—the court of competent jurisdiction to determine the award’s enforceability— set it aside, a decision affirmed by the Indian Supreme Court”.

Background to the legal battle in the US

An International Chamber of Commerce arbitration tribunal awarded a $1.2 bn compensation to the startup Devas Multimedia and investors on September 14, 2015, for the cancellation of the 2005 satellite deal with Antrix Corporation and the US federal court for the western district of Washington confirmed the award on October 27, 2020.

Isro’s commercial arm Antrix Corporation went in appeal to the US appeals court against this confirmation order of October 27, 2020.

The US appeals court ruled on August 1, 2023 that Antrix Corp enjoyed immunity under the US Foreign Sovereign Immunities Act and that the district court of Washington had erroneously overruled this fact while confirming the arbitration award and by allowing Devas Multimedia to register the order in parts of the US to seize assets linked to Antrix Corp.

“It follows that if a foreign state is not a person and thus not entitled to a minimum contacts analysis through the Constitution, it is still entitled to a minimum contacts analysis through our reading of the FSIA. Thus, the district court erred in ignoring our precedents requiring it to conduct a minimum contacts analysis,” the US appeals court ruled in August 2023.

“Devas has failed to meet its burden under the first prong to show that Antrix purposefully availed itself of the privilege of conducting activities in the United States. Devas primarily relies on the Antrix and Indian Space Research Organization (“ISRO”) Chairman’s 2003 visit to Washington D.C. to meet with Forge Advisors and a series of 2009 meetings between ISRO officials and the Devas team,” the appeals court stated in its August 1, 2023 order.

“Principles of comity, diplomacy, and international law, including “a panoply of mechanisms in the international arena,” protect the interests that foreign states have in resisting the jurisdiction of United States courts,” one of three judges on the appeals bench said.

The background to the dispute

The UPA government annulled the Devas-Antrix satellite deal in February 2011 citing the requirement of space spectrum allocated for the satellite services of Devas for security needs. The deal was cancelled after it was cited as a “sweetheart deal” and another instance of corruption under the UPA regime after the 2G scam.

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

After the NDA government came to power in 2014 the Enforcement Directorate and the Central Bureau of Investigation began seriously investigating the deal even as the foreign investors in Devas Multimedia—the German telecom major Deutsche Telekom, three Mauritius investors and Devas Multimedia itself—approached various international tribunals seeking compensation for the failed deal

Devas Multimedia was awarded $1.2 billion by an International Chamber of Commerce, Deutsche Telekom was awarded a $101 million compensation by the Permanent Court of Arbitration in Geneva and the Mauritius investors were awarded a $111 million by UNCITRAL.

The National Company Law Tribunal in India ordered the liquidation of Devas Multimedia on May 25, 2021, citing fraudulence in its creation. Its order was upheld by the Supreme Court of India on January 17, 2022.

The ED and the CBI are currently pursuing cases of money laundering and corruption in India against Devas and former Isro officials over the failed satellite deal.