Devas-Antrix deal: India loses arbitration case at the Hague

The Hague-based Permanent Court of Arbitration (PCA) in a ruling said the Indian government had acted “unfairly” and “inequitably” in nullifying the contract, the city-based Devas Multimedia Private Ltd said in a statement here on Tuesday. The deal involved use of two satellites and spectrum in 2011.

The Tribunal has found that Indian government’s actions in the contract and denying private firm Devas commercial use of S-band spectrum constituted an expropriation, it said.

In its ruling on Monday, the PCA tribunal also held that India breached its treaty commitments to accord fair and equitable treatment to Devas’s foreign investors, it added.

Reacting to the ruling, the Government said it had invoked the essential security interests through “a well reasoned, valid and proper” Cabinet Committee on Security (CCS) decision. It also said the limited liability of compensation shall be limited to 40 per cent of the value of the investment, adding, the precise quantum has not been determined as yet.

“The award of the Tribunal is being examined and legal recourse, as deemed fit, will be taken. We also remain committed to pursue our larger national interests including sovereign strategic security interests in this matter,” the Department of Space (DoS) said in a statement. In the UNCITRAL arbitration between Government of India and Mauritius based investors of Devas under the Indo- Mauritius BIPA (Treaty), the Arbitral Tribunal had issued their award on Jurisdiction and Merits, it said.

The Tribunal has said that GoI’s essential security interest provisions of the Treaty do apply in this case to an extent, the DoS statement added.

In September 2015, in a jolt to Antrix, the commercial arm of ISRO, the International Chamber of Commerce’s (ICC) arbitration body International Court of Arbitration had asked it to pay damages worth $672 million (Rs 4,432 crore then) to Devas Multimedia for “unlawfully” terminating the deal five years ago on grounds of national security. 

The PCA regularly administers cases involving states, including investment treaty claims brought under arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL).

The deal had cost five senior ISRO scientists, including its former chairman G Madhavan Nair, their government jobs.

The unanimous decision that included the arbitrator appointed to the Tribunal by India is the second by an international tribunal arising out of the cancellation of the Devas-Antrix contract.

In September 2015, in a jolt to Antrix, the commercial arm of ISRO, the International Chamber of Commerce’s (ICC) arbitration body International Court of Arbitration had asked it to pay damages worth $ 672 million (Rs 4,432 crore then) to Devas Multimedia for “unlawfully” terminating the deal five years ago on grounds of national security.

The government on Tuesday said its decision to annul the Antrix-Devas deal was taken considering the “essential security interests” through well-reasoned, valid and proper consultations in the Cabinet Committee on Security (CCS). In a statement, Department of Space (DoS) said the limited liability of compensation will be only up to 40 per cent of the value of the investment and the exact quantum has not yet been determined.