Finance Minister Nirmala Sitharaman on Tuesday launched an all-out attack on the UPA government, under which the Antrix-Devas deal was finalised. The controversial deal between Department of Space’s commercial entity Antrix and Bengaluru-based startup Devas Multimedia has been under the scanner for more than a decade now. The deal resulted in court battles between the government of India and Devas not just domestically but abroad as well. Earlier this week, the Supreme Court of India upheld NCLT and NCLAT orders and asked Devas Multimedia to be liquidated. The ‘fraud’, as described by the Finance Minister, started in 2005. Here’s all you need to know about the infamous deal.
Antrix-Devas: The deal that was
In 2005 Anxtrix – the commercial arm of ISRO (Indian Space Research Organisation) – entered into a deal with Devas where the former agreed to build, launch and operate two satellites. Per the deal, 90% of the satellite’s transponder capacity was to be leased out to Bengaluru-based startup Devas for 12 years for Rs 167 crore, after the launch of the satellites. Interestingly Devas was given access to 70 MHz of S-band spectrum, something that is reserved only for security services of India.
Later in 2011, months after the CAG of India (Comptroller and Auditor General) submitted his report on the infamous 2G scam to the parliament, the Antrix-Devas deal was cancelled. Reports back in 2010 and 2011 questioned the deal. Claims were made that the deal included quid-pro-quo.
Decade-long arbitrations between Devas and Indian government
The cancellation of the deal between Antrix and Devas resulted in long legal battles between the government of India and Devas not just domestically but internationally too. Devas started commercial arbitrations at the International Chambers of Commerce (ICC). Mauritius investors in Devas Multimedia, and Germany’s Deutsche Telekom brought two ‘bilateral investment treaty’ arbitrations under the India-Mauritius BIT.
Antrix approached the NCLT (National Company Law Tribunal) asking for liquidation of Devas in early 2021. The NCLT issued its final order in May of 2021, ordering the liquidation of Devas. This was challenged by Devas in the NCLAT (National Company Law Appellate Tribunal), which upheld the NCLT order in September 2021. The case was further taken to the Supreme Court of India, which concurred with the NCLT and the NCLAT while issuing its order on Monday. Indian courts have observed that a fraud has been committed while ruling on the case.
International legal battles
On foreign soils, however, the rulings have so far not favoured India. In September 2017, the ICC awarded Devas compensation worth $1.3 billion on the appeal of the firm’s foreign investors. In June 2019, United Nations Commission on International Trade Law found that India was in breach of the German bilateral investment treaty. The proceeding was initiated by Deutsche Telekom AG.
In another foreign legal tussle regarding the case, a Canadian court had authorised the seizure of assets belonging to Air India and the Airport Authority of India. However, the same order was revoked and 50% of Air India assets were allowed to be taken over by Devas’ investors.