The Government of India has scored a significant victory in its longstanding dispute with the promoters of Devas Multimedia with the Supreme Court of Mauritius barring the latter from pursuing its latest arbitration proceedings against India at the United Nations Commission on International Trade Law.
Devas Multimedia was a satellite communications company which lost out on a deal worth $190 million with Antrix Corporation, a Centre-owned space company. This was because the Manmohan Singh government terminated the contract between Devas and Antrix in 2011, citing corruption and collusion between the two parties.
Miffed by the termination of the agreement, Devas foreign investors initiated the long-drawn battle that was fought at multiple forums, introducing arbitration proceedings in institutions such as the International Chamber of Commerce (ICC). In this arbitral proceeding in 2015, Devas Multimedia was awarded close to $1.3 billion (in current value) in damages to be paid by Antrix.
However, the Indian Supreme Court upheld the order to wind down Devas in 2022. The apex court and NCLT findings also revealed that the company was wrongfully incorporated, initiating liquidation proceedings for Devas Multimedia. In the meantime, the Delhi High Court also set aside the ICC order in favour of Devas Multimedia, offering relief to the government.
This implies that there is a question of whether Devas can recover the award, and shareholders won’t be able to benefit. This is why in February 2022, Devas Mauritius’ shareholders initiated new arbitration proceedings against the Centre under the arbitration rules of the United Nations Commission on International Trade Law (1976) before the arbitral tribunal under the India Mauritius bilateral investment treaty (BIT).
According to Devas Mauritius shareholders, the Indian government failed to protect their investment in Devas by allegedly wrongfully liquidating the company.
In an interim order passed on Thursday, the Supreme Court of Mauritius prohibited Devas Mauritius shareholders from pursuing this arbitration proceeding. This will be a significant setback for Devas Mauritius shareholders who have registered the ICC award in foreign jurisdictions such as the US as well as seized Antrix’s assets in these jurisdictions to recover the award.
When contacted, Antrix declined to comment. Devas shareholders did not respond to queries sent by businessline.