Antrix-Devas arbitration: A timeline of the 11-year-long legal battle

The Delhi High Court has set aside an arbitration award that asked Antrix to pay $562 mn to Devas

The Delhi High Court on Monday set aside an arbitration award against the Antrix Corporation, the commercial arm of the Indian Space Research Organisation (Isro), in which it was asked to pay $562 million in damages, along with interest, to Bengaluru-based firm Devas Multimedia.

Here’s a look at the 11-year-long legal battle between the two parties.

2005: The Deal

In 2005, Antrix and Devas signed an agreement wherein the latter would provide multimedia services using the S-band spectrum transponders on two Isro satellites built at a cost of Rs 766 crore. Multiple foreign investors had backed the project, including three Mauritian investors and Germany’s Deutsche Telekom (DT), one of the world’s leading telecommunication companies.

The deal was soon mired in controversy with allegations of corruption and irregularities, including claims that the S-band spectrum was offered at throwaway prices and Devas — which was established by former Isro officials, and a company called World Space — possessed insider knowledge about the commercialisation of S-band spectrum.

2011: The annulment

Antrix annulled the agreement amid the 2G controversy. The annulment was propagated by the United Progressive Alliance (UPA) government, in the wake of reports that the deal was a “quid pro quo” settlement between Antrix officials and Devas. In fact, the decision was made much earlier and the Department of Space had recommended the annulment on June 30, 2010. The Indian Space Commission accepted on July 2, 2010, but the decision was not communicated to Devas and was directly announced publicly in February 2011.

2012-13: Bilateral Investment Treaty claims

The government’s decision to rescind the contract prompted Devas’ foreign investors to bring separate Bilateral Investment Treaty (BIT) claims against India under the India-Mauritius BIT and India-Germany BIT, respectively.

BITs are designed to prevent unjustified meddling or violation of foreign investors’ rights by instituting regulatory restrictions on the host state’s power to intervene.

Against the two separate BITs, India maintained that the deal was cancelled in view of increasing demand for the S-band satellite spectrum for national security purposes.

2014-2020: The tribunals

The DT Tribunal started in May 2014, whereas the India-Mauritius BIT tribunal began in September. India relied upon Article 11(3) of the India-Mauritius BIT, which provides: “[T]he provisions of this Agreement shall not in any way limit the right of either Contracting Party to apply prohibitions or restrictions of any kind or take any other action which is directed to the protection of its essential security interests or to the protection of public health or the prevention of diseases in pets and animals or plants.” India argued that reserving the S-band satellite spectrum for the needs of defence and paramilitary was aimed at protecting its “essential security interest.”

In both cases, however, the tribunals awarded the case to the Devas investors, citing delays and indecision in reallocating the S-band spectrum as an indication that there was no immediate need or emergency for reclaiming the spectrum, and that India had breached its obligation towards the investors under the two BITs. The two tribunals ordered India to pay $160 million and $132mn, plus accrued interest, respectively to the Mauritius and German investors in 2020.

In addition to the BIT disputes, The International Chamber of Commerce oversaw the international commercial arbitration that Devas initiated against Antrix. The ICC tribunal also ruled that Antrix’s termination of the contract was illegal and ordered Antrix to pay $562.5 million to Devas as damages.

2021-22: Appeal for liquidation

In January 2021, Antrix approached the National Company Law Tribunal (NCLT), seeking liquidation of Devas on the grounds that the company was incorporated with “fraudulent motive”.

In May, the NCLT ruled in favour of Antrix and ordered the liquidation of Devas, which then challenged the order in the National Company Law Appellate Tribunal (NCLAT), Bengaluru.

In September, the NCLAT upheld the NCLT’s order. The case then moved to the Supreme Court.

In January 2022, the apex court upheld the order for liquidation. It also rejected Devas’ contention that Antrix’s winding up petition was aimed at depriving it of the benefit of the earlier favourable arbitration awards.