US court stays Devas foreign investors over $111 million award

Devas’s three Mauritius-based investors — CC/Devas Mauritius Ltd, Telcom Devas Mauritius Ltd, and Devas Employees Mauritius Pvt Ltd – were on October 13, 2020, awarded a USD 111-million compensation by the United Nations Commission on International Trade Law (UNCITRAL) tribunal in Hague, through the US federal court.

The Government of India appealed against the UNCITRAL award in a Dutch court last year and the matter is still pending.

Citing this appeal while granting India’s motion to stay the case filed by the investors, the US court for the District of Columbia on Thursday said a “stay would promote judicial economy, respect international comity, and prevent hardship to India”.

The court also said the Indian government will not have to post a security while the case is pending, since issues such as whether the court has jurisdiction have not been decided yet.

Under the failed deal, ISRO was supposed to lease two communication satellites to Devas for 12 years at a cost of Rs 167 crore, while the Bengaluru-based start-up was to provide multimedia services to mobile platforms in India using the satellites’ space band or S-band transponders.

Amid the 2G crisis, the then UPA government annulled the deal in February 2011, citing the requirement of the S-band spectrum for the country’s security purposes.

In 2021, India’s National Company Law Tribunal ordered the liquidation of Devas Multimedia, citing fraudulence in its creation. The Supreme Court upheld the NCLT order on January 17 this year.

After the cancellation of the deal, Devas’s foreign investors – German telecom major Deutsche Telekom and the three Mauritius investors – and Devas Multimedia itself approached various international tribunals seeking compensation.

The Mauritius investors, meanwhile, are also attempting to find US assets of ISRO, its new commercial arm ‘New Space India Limited’, and Antrix Corp. In February this year, they moved the US federal court for Washington district and asked it to identify the assets of these entities as “alter egos of Antrix Corp and GoI” and seize their assets.

The investors’ plea was to enforce a USD 1.2 billion compensation award made in favor of Devas Multimedia by the International Chamber of Commerce on September 14, 2015, which was confirmed by the Washington court on October 27, 2020.