The Supreme Court of Netherlands refused to overturn $111.3 million arbitral award levied by the District Court of Hague, finding the Indian government liable for improperly terminating the Devas-Antrix deal in 2011.
The Dutch Supreme Court did not provide its reasoning for its decision favouring the shareholders of Devas Multimedia Pvt Ltd, saying only that it had considered and rejected India’s arguments — among them, that the shareholders had not made an investment that qualified for protection under the relevant investment treaty.
A separate challenge lodged by India against the subsequent quantum award remains pending in the Netherlands.
The decision marks a win for the Devas shareholders amid an increasingly contentious dispute with the Indian government, which is also on the hook for a $1.3-billion arbitral award issued to Devas in a parallel proceeding with the International Chamber of Commerce (ICC).
That award was issued against the Antrix Corp, ISRO’s private space arm. This $1.3-billion award (ICC award) was set aside by the Delhi High Court after concluding that it “suffers from patent illegalities and fraud.”
The victory for Devas shareholders comes after the Supreme Court of Mauritius barring Devas shareholders from pursuing its latest arbitration proceedings against India at the United Nations Commission on International Trade Law.
Mauritius court ruling
businessline reported in January that the apex court of Mauritius barred Devas from pursuing the 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).
Devas shareholders had wanted to initiate these arbitration proceedings so that they have a better chance at claiming the ICC award, since the liquidation of Devas as well as the Delhi High court’s order to set aside this award could potentially prevent shareholders from claiming this award.
Therefore, while the judgment by the Dutch Court betters chances for Devas shareholders to claim $111.3 million award against the Centre – the much larger $1.3 billion ICC award still remains out of their grasp.
Devas shareholders legal counsel, Matthew D McGill, Partner at Gibson Dunn & Crutcher LLP, said, “The Modi government’s recalcitrant defiance of India’s international investment treaty obligations is a stark warning to those who India now invites to invest.”