A crucial press release issued by the Centre after the meeting of the Cabinet Committee on Security on February 17, 2011, announcing the annulment of the agreement between Antrix and Devas may have cost India the case at the Permanent Court of Arbitration (PCA) tribunal based in The Hague.

The final ruling of the tribunal, a copy of which is with BusinessLine, reveals that the court relied heavily on the wording of this press note to rule that the agreement between Antrix and Devas was scrapped on considerations beyond national security.

The dispute between Antrix and Devas Multimedia, a satellite-based communications service provider, arose when the former cancelled a contract for building two satellites for the latter in 2011.

A press release issued after the Cabinet meeting in February that year stated that the deal was being cancelled due to “the needs of defence, para-military forces and other public utility services as well as for societal needs, and having regard to the needs of the country’s strategic requirements...”

Govt’s missteps

The tribunal, in its ruling of July 25, 2016, held that the expressions “strategic needs” or “strategic requirements” covered a range of activities that went far beyond the military or paramilitary sectors or the “essential security interests” of India.

This, in effect, poured water over India’s stand that the deal was scrapped only due to national security. Under international arbitration rules, if a state properly invokes a national security exception under an investment treaty, it cannot be liable for compensation of damages, going forward.

According to the order passed by the court in The Hague, India also failed to push for this exception by not producing key officials who dealt with the case, including K Radhakrishnan, who was the Chairman of the Space Commission between 2009 and 2011, G Balachandran, then Additional Secretary, Department of Space, or Geeta Varadhan, Director of Special Projects at the Department of Space.

No testimony

“The tribunal did not have the benefit of testimonies from senior officials who were directly involved in the process leading to the CCS decision of February 17, 2011 ... who appear to have had long exposure to the needs of the military concerning the S-band,” the order stated.

Devas, on the other hand, produced a number of witnesses and experts who provided considerable information on the negotiation and implementation of the agreement as well as expertise on the allocation and management of spectrum.

‘Left in the dark’

Although India produced numerous records and communications to show that there was demand for S-band spectrum from various segments of the armed forces even before the deal was done with Devas in 2005, the tribunal held that India should have informed Devas about this requirement.

“The evidence shows that right up to February 8, 2011, the claimants (Devas) were completely left in the dark about the Space Commission’s decision and the alleged growing needs of the military and their possible impact on the Agreement,” the tribunal ruled.

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