US court upholds ICC arbitration award, tells Antrix to pay $1.2 b to Devas Multimedia

Our Bureau Mumbai | Updated on October 29, 2020 Published on October 29, 2020

Rejects ISRO arm’s objection over jurisdiction

The US federal court for the Western District of Washington has asked Antrix Corporation, ISRO’s commercial arm, to pay $1.2 billion to Devas Multimedia, per the arbitration award of the International Chamber of Commerce. The arbitration award was given in 2015 after Antrix cancelled an agreement to build, launch, and operate two satellites and make available 70 MHz of S-band spectrum.

Devas had challenged Antrix’s decision to cancel a 2005 contract for building two satellites for Devas, citing alleged irregularities in the deal. The decision was backed by the then UPA government. One of the concerns was that Devas was getting access to spectrum in the 2500 MHz band at a price much lower than what the Centre was able to garner in the 2010 auction.

It was not until July 2, 2010 — weeks after BusinessLine revealed the nature of the deal — that the Space Commission was briefed on the agreement. In 2011, Devas initiated proceedings in accordance with the Rules of Arbitration of the International Chamber of Commerce. In September 2015, a three-member ICC panel concluded that Antrix had wrongfully scrapped the deal and awarded Devas $562.5 million plus interest. This was opposed by Antrix through an appeal at the Bengaluru High Court.

Meanwhile, Devas filed a plea in the US court seeking enforcement of the arbitration award. Antrix questioned the jurisdiction of the US court in the case. The US court rejected Antrix’s objection over jurisdiction stating that while foreign entities, are generally “immune from the jurisdiction of the courts of the US,” there is an exception when a party seeks to confirm an arbitral award against the foreign state that is “governed by a treaty or other international agreement in force for the US calling for the recognition and enforcement of arbitral awards.”

The court said Antrix “does not argue, let alone cite any facts showing, that the agreement was the product of corruption or that the respondent (Antrix) annulled the agreement on that basis.”

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Published on October 29, 2020
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