US court stays confirmation of $111-m award for Devas shareholders

Ayushi Kar | Updated on: Mar 30, 2022
Counsel for Devas shareholders said, “We’re more determined than ever to hold the Government of India to account for its confiscation of Devas and ensure the debt is paid.”

Counsel for Devas shareholders said, “We’re more determined than ever to hold the Government of India to account for its confiscation of Devas and ensure the debt is paid.” | Photo Credit: studiocasper

Cites litigation that India is pursuing the case in the Netherlands

In a win for India, the United States District Court of Colombia has decided to grant a temporary stay over the confirmation of $111-million award that Devas’ Mauritius shareholders were pursuing to enforce in the United States. The District Court cited the litigation that India is pursuing in the Netherlands, wherein India wants the Dutch judiciary to set aside the award.

The award was granted by the three-member tribunal of the Permanent Court of Arbitration to Devas’ Mauritius shareholders, in Hague (Netherlands) in 2016. India had challenged this.

In light of parallel proceedings in the Dutch court, the District Court chose to grant the stay, in order to “exercise judicial economy”, especially given that Devas will not have grounds to enforce the award in the US, if an “arbitration award was lawfully nullified by the country in which the award was made”.

Commenting on the ruling, Jay Newman, senior adviser to Devas shareholders said, “This should provide little comfort to the Modi government’s scheme to evade paying Devas shareholders what they are rightly owed. Litigation is a process, and India remains on the hook. We’re more determined than ever to hold the Government of India to account for its confiscation of Devas and ensure the debt is paid.”

The backstory

On July 25, 2016, a three-member tribunal of the Permanent Court of Arbitration in The Hague held that the Republic of India had breached the India-Mauritius bilateral investment treaty by annulling the Antrix-Devas agreement in 2005. Subsequently, the tribunal decided on an amount of $111 million that the petitioners (CC/Devas (Mauritius) Ltd. Telcom Devas Mauritius Limited, and Devas Employees Mauritius Private Limited) will be granted as a result on October 12, 2020.

India has legally challenged the award, requesting a complete set-aside; the matter is currently on appeal in the Dutch Supreme Court. India has also challenged the award amount by filing suit in The Hague District Court.

In fact, the Indian Supreme Courts’ judgment that Devas was fraudulently incorporated, will be used by India in the legal arguments to nullify this award in the foreign courts. Devas’ Mauritius shareholders had initiated proceedings on the enforcement of this award in the US in 2020. 

Not an absolute win

This is not an absolute win for India however, since a separate wing of Devas shareholders has already gotten a nationwide confirmation of $1.3-billion award, which was granted by the International Chamber of Commerce in the United States. This means Devas can seize assets in any jurisdiction in the US to claim the award.

Moreover, the $111-million award has been confirmed and enforced in many jurisdictions internationally, including Canada where a Canadian court granted Devas shareholders the right to seize assets belonging to the Airport Authority of India in Montreal (AAI is fighting the matter in courts). In January, a Paris court allowed Devas shareholders to seize an apartment that houses the Indian Deputy Chief of Mission, valued at 3.8 million euros, as part of enforcing the $111 million award.

Published on March 30, 2022
COMMENTS
This article is closed for comments.
Please Email the Editor

You May Also Like

Recommended for you