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Antrix vs Devas: Antrix loses $1.2 Billion Arbitration Award to Devas in Washington

The US Court rules that the commercial arm of the Indian Space Research Organisation, the Antrix Corporation has to pay the compensation of $1.2Billion to the Bengaluru’s start-up, Devas Multimedia Pvt Ltd., on Tuesday, for canceling a deal to build and launch two satellites to provide multimedia services via space band spectrum in 2005.

The federal court of US in Western District of Washington had confirmed the arbitration award made by the International Court of Commerce(ICC) in favour of Devas Multimedia Pvt Ltd, in September,2015 which was made in view of the Government cancelling the satellite deal, made in 2005, in February 2011 by stating the need of usage of the Space Band Spectrum for security communications.

Devas Multimedia Pvt Ltd., was formed in 2004, by a group of former ISRO and World Space employees. The foundation of Devas was laid in 2003, during a visit to US by ISRO and other Government officials.

In 2018, Devas Multimedia Pvt Ltd., approached the United States Federal Court for confirmation of the arbitration award made by the International Court of Commerce(ICC) in 2015. Last year, the US Federal Court had imposed a give-year stay on proceedings to await progress in cases filed over the matter in the Indian Courts. In September, 2020, stating the lack of progress in the Indian Courts, the US Federal Court had removed the stay imposed on Devas to enforce compensation payment to be made by the Indian Government over the failed Satellite deal in 2005.

The 18-page order, given by the US Federal Court Judge, Thomas S Zilly, says, “The petition to confirm the arbitration award is granted.” The order also says, “ Full amount of the award, $562.2 Million, together with the pre-award simple interest at the rate of three-month USD LIBOR +4%, from February 25, 2011 to the date of award, I.e., September 14, 2015, ($672 Million) is the compensation that the Antrix Corporation has to pay Devas Multimedia for the cancellation of 2005 deal.

In addition to this, the US Federal Court had ordered that the simple interest @18% per annum on the award amount from the date of award(September 14, 2015) to the date of judgement (nearly $331,000 per day) must be paid by the government entity. The court said, “ Any objections to the amount of judgement shale filed on or before 3rd November, 2020.”

The Antrix Corporation claimed that the US Court does not have jurisdiction in India and also stated that it should not be treated as an extension of the Government of India. The US Federal Court, however stated that it has jurisdiction under the US Foreign Sovereign Immunities Act and said,” The Matrix has no satellite, satellite launch vehicles, transponders or electromagnetic spectrum, of it’s own, but rather makes assets owned and controlled by the ISRO and DOS(Department of Science). Most of the Antrix’s commercial activities are financed by the Government of India.”

The US court also said,” In the year 2003, Dr. Krishnaswamy Kasthurirangan, the former chairman of Antrix and ISRO, visited Washington DC and signed a Memorandum of understanding with Forge Advisors, providing that the respondent had a ‘long term objective’ of building a strategic partnership that leverages Antrix’s satellite & space capabilities to enable new social and commercial applications. After Petitioner’s company was established, at least five US Citizens served on it’s board of directors.”

The US Court also ruled out the Antrix’s argument, which claimed that the ICC Compensation award was made by the Tribunal where it did not have the appointee, and stated that the Antrix had failed to appoint an arbitrator despite the notices being issued for the launch of arbitration process.

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