Devas approaches US Court in Antrix case for enforcement of Arbitration Award ordered by The Hague

Devas approaches US Court in Antrix case for enforcement of Arbitration Award ordered by The Hague

The petition claimed that the award can be enforced in the US because India is a signatory to the New York Convention

Devas Multimedia filed a petition before the US District Court seeking enforcement for damages awarded against Indian Space Research Organization's (ISRO), commercial arm Antrix Corporation by the Permanent Court of Arbitration Tribunal at The Hague.

The case follows back in 2012 when Devas Multimedia had started an international arbitration proceeding at the International Chamber of Commerce. Followed by in 2015 International Chamber of Commerce ruling in favor of Devas awarding $562 million damages plus interest, totalling to $1.1 billion.

Erstwhile, in 2016 the Permanent Court of Arbitration Tribunal had ruled against India's decision to discard the satellite deal with Devas Multimedia Private Ltd. Devas had challenged Antrix's decision to cancel a 2005 contract for building two satellites for Devas, citing alleged irregularities in the deal. In 2018, The Hague District Court denied India's challenge to the Tribunal award.

In 2020, the Tribunal ordered India to pay damages to Devas amounting to 40 per cent of the overall penalty set at $740 million, which India subsequently challenged. Additionally, the US District Court separately ordered India to pay $1.2 billion in damages, which India has challenged at the US Court of Appeals. The fresh petition filed by Devas came into the picture after it won in a parallel case.

The petition was filed by three investment firms related to Devas Multimedia. The petition claimed that the award can be enforced in the US because India is a signatory to the New York Convention. "By entering into the New York Convention, India waived any immunity it may otherwise possess in relation to an action to enforce an award in this jurisdiction," stated the petition filed by three Mauritius-incorporated companies — Devas (Mauritius) Ltd, Devas Employees Mauritius Private Ltd, and Telcom Devas Mauritius Ltd.

According to Devas, the Indian agencies, including the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI), were targeting the company and its officials to prevent its efforts from getting the arbitration award enforced.

The petition vehemently asserted the following statement, "in early January 2017, India (through the ED) froze the bank accounts and mutual funds in India of Devas and several of its personnel. India's actions plainly were intended to financially cripple the ability of Devas to defend itself from the continued harassment by India."

It further added, "on 30th January, 2019, the Enforcement Directorate – without having heard Devas, its investors, or its present and former directors/officers – purported to issue a penalty order of approximately $220 million against Devas, its investors (including petitioners), and present and former directors/officers." Antrix raised the issue of jurisdiction of the US Court in the case.

However, the US Court denied Antrix's objection stating that although foreign entities are generally 'immune from the jurisdiction of the Courts of the US,' there was an exception when a party can seek to confirm an arbitral award against the foreign state that is governed by a treaty or other international agreement in force for the US calling for the recognition and enforcement of arbitral awards. Even though India has already challenged this order at the US Court of Appeals, Devas wants to now enforce the award given by the court in The Hague.