An international tribunal in The Hague has ruled against the Union government cancelling a contract between Antrix Corporation, the corporate arm of the Indian Space Research Organisation (Isro), and
An international tribunal in The Hague has ruled against the Union government cancelling a contract between Antrix Corporation, the corporate arm of the Indian Space Research Organisation (Isro), and Devas Multimedia Pvt. Ltd for the lease of S-band spectrum and the use of two satellites. The decision, which was unanimous and included the arbitrator appointed to the tribunal by India, makes the country liable to pay compensation running into millions of dollars.
The space agency, however, not only sought to play down the ramifications of such a ruling but also indicated it could seek legal recourse.
The Permanent Court of Arbitration at The Hague on Tuesday ruled that the government’s actions in 2011 amounted to expropriation, and that in annulling the Isro-Devas contract the government had breached treaty commitments to accord fair and equitable treatment to Devas’ foreign investors. The tribunal said the Indian government had acted “unfairly” and “inequitably” in nullifying the contract, Devas Multimedia Pvt. Ltd said here on Tuesday.
Under the deal, signed in 2005, Antrix was to provide 70 MHz of the scarce S-Band wavelength to Devas for its digital multimedia services by leasing 90 per cent of the transponders on Isro’s GSAT-6 and GSAT-6A satellites. Devas, in turn, was to pay Antrix a total of $300 million over 12 years.
This tribunal’s decision is the second such arbitration outcome in the Antrix-Devas controversy. Last year, the International Chamber of Commerce’s arbitration body, the International Court of Arbitration, asked Antrix Corporation to pay damages of $672 million to Devas for “unlawfully” terminating the deal on grounds of national security. Devas Multimedia Pvt. Ltd has since moved the Delhi high court for recovery of damages.
The Department of Space (DoS), however, maintained that the precise quantum of compensation was yet to be determined but shall be limited to 40 per cent of the value of investment. “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,” a DoS release said while maintaining that the government had cancelled the contract by invoking essential security interests through a “well-reasoned, valid and proper CCS (Cabinet committee on security) decision”.
Soon after the contract was cancelled, the Union government had barred former Isro chairman Gopalan Madhavan Nair and four other top space scientists from holding any position in government organisations. This action came in the aftermath of a report submitted by a committee headed by former Chief Vigilance Commissioner Pratyush Sinha that said Mr Nair had not informed the Union Cabinet about the contract signed with Devas Multimedia Pvt. Ltd for lease of S-band transponders.
Officers of the Enforcement Directorate (ED) and CBI are investigating the contract. The ED had issued a show-cause notice to Devas for contravention of provisions of the Foreign Exchange Management Act of 1999. The CBI has filed an FIR against, inter alia, Devas Multimedia Pvt. Ltd and other unknown public servants of Antrix/Isro/DoS, and the case is under investigation, the DoS statement said.
