What is Devas Case?

January 10, 2022

Devas is a multi-media company. It offers satellite-based services. Antrix is an Indian Government owned company. It is the commercial arm of ISRO. That is, ISRO launches satellites and provides technological assistance for private firms through Antrix. It is operated by Department of Space.

Antrix – Devas Deal

In 2005, Antrix and Devas signed an agreement. Under the agreement, Devas was to provide multimedia services to mobile users. The services were to be provided using S – band satellite leased from Antrix.
In 2011, this agreement was cancelled by the UPA government. UPA government wanted the S – band for national security.
Devas went to the International Chambers of Commerce and also to two BIT (Bilateral Investment Treaty) arbitrations. Devas also filed a case in Permanent Court of Arbitration. The PCA ruled that Antrix has to pay 1.6 billion USD as compensation.

Why was the deal cancelled in 2011?

It was cancelled because of non – compliance of rules, conflict of interest, favoritism and financial mismanagement.

Why is it in news now?

On January 3, 2022, Devas announced that it had won an order. The order allows Devas to seize 30 million USD worth properties of Air India. The order was generated by a Canadian court.

How can a Canadian court issue order?

Canadian jurisdiction follows restrictive immunity. (India also follows restrictive immunity). Restrictive immunity means a state is immune from the jurisdiction of other state (or country) courts to a certain extent. That is, it need not listen or look upon other country’s rules and regulations to a certain extent. Immune in relation to those actions where the sovereign power shall be excised. On the other hand, absolute immunity means total immunity. Other countries or foreign firms cannot sue or seize the country’s assets.

What options do India have?

India can either challenge the decision in an appellate court of Canada or it can comply. It is highly unlikely that India will comply with the judgement.

Why AAI when deal is with Antrix?

Say X (GoI) owns B (AAI) and C (Antrix). B has borrowed Rs 5 from P (Devas) and has failed to return. Now P can collect these 5 rupees from C or X as well, right? It is of the same concept. The assets of an organization (Air India or B in our case) shall be seized if that organization is a alter ego (Antrix or C in our case) of the State (GoI) that fails to comply with arbitrary rules.

« Previous PostNext Post »