Delhi HC junks arbitral award directing Antrix to pay $560 million to Devas

In a huge win for the Centre, the Delhi High Court on Monday set aside an arbitral award passed by the International Chamber of Commerce asking Antrix Corporation Limited to pay damages of over US$ 560 million with interest to Devas Multimedia Private Limited.

Antrix Corporation Limited is the commercial arm of Indian Space Research Organisation (ISRO). 

The arbitral award was passed in 2015 directing Antrix to pay the sum for illegally terminating its satellite deal with Devas Multimedia. The US courts had also upheld the award. 

Antrix then moved the Delhi High Court seeking to set aside the arbitral award. 

Justice Sanjeev Sachdeva on Monday said the arbitral award of September 14, 2015 was plagued with patent illegalities and fraud and was also in conflict with the public policy of India.

The judge said that the Supreme Court, hearing a plea regarding fraudulent act of Devas in January said ‘the very seeds of the commercial relationship between Antrix and Devas were a product of fraud perpetrated by Devas and thus every part of the plant that grew out of those seeds, such as the agreement, the disputes, arbitral awards were all infected with the poison of fraud’.

The judge also said that the findings of the Supreme Court indicate the award was antithetical to the fundamental policy of Indian law, as it was contrary to the national economic interests and violated the Foreign Investment Promotion Board (FIPB) policies and Prevention of Money Laundering Act (PMLA).

On August 17, Devas Multimedia seized USD 87,457.47 cash that Antrix Corporation held in the US as it looked to enforce a USD 1.2 billion compensation it had won over the termination of the satellite deal. 

Antrix and Devas had made a satellite deal which was terminated by Antrix in 2011 due to changes in policy decisions. Then the arbitral award was passed in 2015.

Antrix said the deal had gone sour due to acts of corruption, fraud and criminality committed by the erstwhile management of Antrix and Devas.

Acting on a plea by Antrix, the National Company Law Tribunal (NCLT) ordered the winding up of Devas on grounds of fraud. The order was challenged and the National Company Law Appellate Tribunal(NCLAT) also sided with NCLT. Devas then challenged the NCLAT judgment before the Supreme Court which, on January 17 this year, upheld the NCLAT order and said Devas was formed for fraudulent purposes.

“The basic notions of morality and justice are always in conflict with fraud and that allowing Devas and its shareholders to reap the benefits of their fraudulent action, would send a wrong message,” the apex court had said.