The district court of The Hague in the Netherlands has dismissed India’s request to annul a USD 111 million compensation award granted to foreign investors in Devas Multimedia. This payment was sanctioned by the United Nations Commission on International Trade Law (UNCITRAL) tribunal after India cancelled a satellite deal from 2005 with Antrix Corporation, which is a part of India’s ISRO, and Devas Multimedia in 2011. The court refused to overturn the award, holding the Indian government accountable for the unjust termination of the agreement.
The Devas-Antrix Deal
In 2005, Antrix Corporation, the commercial segment of the Indian Space Research Organisation (ISRO), signed a satellite agreement with Devas Multimedia, a Bengaluru-based start-up. The deal consisted of leasing the S-band on two ISRO satellites, GSAT-6 and GSAT-6A, for a duration of 12 years in order to facilitate digital multimedia services.
The S-band is a reserved portion of the microwave band of the electromagnetic spectrum, used for satellite communication, radar, and disseminating vital real-time data. It also delivers high resilience against rain fade and environmental interference, making it extremely valuable for mobile broadband services. It is widely utilized within the shipping, aviation, and space industries. GSAT-6 and GSAT-6A are high-powered S-band communication satellites.
Termination of the Satellite Deal
The Indian government abruptly terminated the agreement in 2011, citing national security issues. The decision was made amidst the 2G scam exposure and accusations that the Devas deal involved selling off a communication spectrum worth an estimated Rs 2 lakh crore at a fraction of its actual cost.
Compensation Claims and Legal Battles
After the abrupt cancellation of the deal, foreign investors in Devas Multimedia sought compensation through international tribunals. In 2015, the International Chamber of Commerce (ICC) arbitration tribunal awarded Devas Multimedia USD 1.2 billion as compensation. One of the investors, Deutsche Telekom, was compensated USD 101 million by the Permanent Court of Arbitration in Geneva. In 2020, three Mauritius-based investors were awarded a sum of USD 111 million by UNCITRAL. The Indian Government failing to pay the afore-mentioned compensation led Devas to file an appeal in the US and EU to liquidate Indian Public Sector Undertaking (PSUs) assets for penalty recovery.
India’s Challenge Against the Compensation Awards
In 2022, the Indian government disputed the compensation awards, referencing a Supreme Court of India ruling that upheld the liquidation of Devas Multimedia on charges of fraud. Currently, the Enforcement Directorate and Central Bureau of Investigation are pursuing cases related to money laundering and corruption against Devas and its officials in India.
The Ruling of The Hague District Court
The district court in Hague dismissed India’s appeal to overturn the compensation awards, ruling that the allegations of deceit, fraud, and corruption had already been addressed and rejected during earlier legal proceedings. It stated that the judgment of the Supreme Court of India bears no independent significance in this context.
About the International Chamber of Commerce
The International Chamber of Commerce (ICC) is the largest global business organization that works towards supporting international trade and promoting responsible business conduct. Since its establishment in 1923, it has been instrumental in resolving international commercial and business disputes to aid trade and investment. The ICC’s headquarters is located in Paris, France.