Antrix Corporation and Devas Multimedia have found themselves amidst an unresolved controversy over the signing and subsequent cancellation of a significant deal involving S-band spectrum. A decade has passed since the beginning of this contentious issue, yet the implications are far from settled. This article explores the intricacies of this situation, starting from the origins of the controversy, examining the engagements between parties, to the current state of affairs.
The History of the Spectrum Allocation and its Significance
The International Telecommunication Union granted India the S-band spectrum in the 1970s. This frequency is recognized globally as 2.5 GHz band and is highly valuable for providing mobile broadband services using Fourth Generation (4G) technologies such as WiMax and Long Term Evolution (LTE). Fearing that the spectrum would be lost if not utilized effectively, 40 MHz of S-band was given to the Department of Telecom (DoT) for terrestrial use around 2003. Furthermore, the Department of Space (DoS), or specifically the Indian Space Research Organisation (ISRO), was supposed to put 70 MHz to efficient use.
The Controversial Deal and its Subsequent Cancellation
In 2005, Antrix, the commercial branch of the DoS, and Devas Multimedia signed a deal whereby ISRO promised to lease two communication satellites (GSAT-6 and 6A) to Devas for a period of 12 years. In exchange, Devas was expected to provide multimedia services to mobile platforms in India through S-band transponders on the satellites. However, in 2011, amid allegations related to the 2G scam and fraud in the broadband spectrum auction, the government scrapped the deal. The government justified its decision by stating that it required the S-band satellite spectrum for national security and other social purposes.
Legal Proceedings and Unresolved Disputes
Subsequently, in August 2016, the Central Bureau of Investigation (CBI) filed charges against officials associated with Devas, ISRO, and Antrix. Two former ISRO and Antrix executives were among those charged for being part of a criminal conspiracy. Unsurprisingly, Devas Multimedia initiated arbitration at the International Chambers of Commerce (ICC). Two separate arbitrations were also initiated under the Bilateral Investment Treaty (BIT) by investors from both Mauritius and Germany. Ultimately, India lost all three disputes and was ordered to pay USD 1.29 billion in damages.
The Implications of Non-payment and Seizure of Property
Due to the Indian Government’s failure to pay the compensation, a French court recently authorized the freezing of Indian government property in Paris. The principle of State Immunity, a well-established concept in international law, protects a state and its property against legal proceedings in courts of other countries. However, different countries interpret and apply this principle according to their national legislations and domestic judicial practices. Hence, properties serving commercial functions can still be seized.
Antrix Corporation Limited and Other Key Entities
Antrix Corporation Limited, based in Bengaluru, is a wholly owned Government of India Company functioning under the administrative control of the Department of Space. Established in September 1992, it serves as the marketing arm of ISRO. Meanwhile, the International Telecommunication Union, a UN specialized agency for information and communication technologies, allocated the global radio spectrum. The International Chamber of Commerce has been involved in resolving international commercial and business disputes since 1923.
India’s Current Arbitration Scenario
The Supreme Court recently upheld the government’s 2011 stance and directed Devas Multimedia to wind up business operations in India. Antrix submitted a plea to the National Company Law Tribunal (NCLT) in January 2021 requesting the liquidation of Devas, alleging it was incorporated fraudulently. As a result, the tribunals directed the winding up of Devas and appointed a provisional liquidator for this purpose.
This multifaceted issue, starting from the allocation of S-band spectrum to the unending disputes between Antrix and Devas, sheds light on the complexities involved in communication spectrum deals. The lessons learned from this controversy, coupled with effective regulations, should pave the way for smoother operations in the future.
