Shareholders of Devas Multimedia have lodged new arbitration proceedings against the Government of India in the aftermath of the Supreme Court decision to uphold the closure order against Devas Multimedia. The shareholders claim that since the company has been wound up, their share of the International Criminal Court’s $1.3 billion award should be given to them directly. The ICC had given the award to the company in 2015.
Devas Mauritius shareholders sent a notice of arbitration to the Government of India on February 2 to directly secure their share in the International Criminal Court’s $1.3 billion award to Devas payable by India.
This comes after the premier court’s decision to liquidate Devas initiates a new “cause of action” or brings new facts to the foray, as the company Devas to whom ICC awarded the $1.3 billion sum is liquidated. Thus, the Mauritius shareholders claim that a new award outlining their share in the sum should be initiated to them directly.
Worldwide enforcement sought
Claimants CC/Devas (Mauritius) Ltd, Telcom Devas Mauritius Limited and Devas Employees Mauritius Private Limited are seeking new arbitration proceedings against the Republic of India, under the Arbitration Rules of the United Nations Commission on International Trade Law (1976). They are seeking an ad hoc arbitration that will not be administered by any institution, rather, both parties (Devas Mauritius Shareholders and Republic of India) must appoint arbitrators to oversee the proceedings in the span of two months.
At the moment, Devas shareholders are pursuing the enforcement of ICC awards worldwide, the most notable being in the United States. There they are seeking nationwide enforcement of the award to seize Indian public sector units assets, the most noteworthy being Air India which has embroiled Tatas into the mix as well. However, the Indian courts have finally resolved the legal proceedings on the issue of liquidation of Devas. The Supreme Court has decided to uphold the winding down order by the National Company Law Tribunal as well as the National Company Appellate Law Tribunal. Thus, the Republic of India and Antrix are arguing in court proceedings, that liquidation of Devas prevents shareholders from claiming the award, (if it is enforced), since, according to liquidation rules, shareholders are last to be paid, if they are paid at all.
Sanctity of ICC
In addition to this, the Delhi High Court will come to a decision regarding the sanctity of the ICC award itself on February 15. If the high court does not uphold the award by the international tribunal, according to sources, India will use the high court decision as grounds to undercut the enforcement of the ICC award internationally.
However the new arbitration initiated by Mauritius shareholders and the legal battle around enforcement of the ICC award worldwide are independent of each other. Both will be pursued in parallel.
“The Indian government has done everything possible to prevent Devas from enforcing its $1.3 billion ICC Award against State-owned Antrix. It has gone so far as to liquidate Devas and amend its arbitration act to hamper Devas’s efforts to collect on the Award. The Indian government must now be held to account for its taking of Devas’s arbitration award and the loss suffered by Devas’s shareholders.” said the shareholders.