Swiss Court ordered seizure of $2.75 mn in Devas Multimedia case: Govt

The Swiss court had ordered the seizure of $2.75 million held by the International Air Transport Association (IATA) on behalf of the Airports Authority of India (AAI) on an application by Deutsche Telekom on March 24 2022, government informed the Parliament on Monday.

V.K Singh, the Minister of State (MoS) in the Ministry of Civil Aviation was responding to a question raised in the Rajya Sabha.

The Minister informed that the AAI has engaged a Counsel to represent it before the Swiss Court, along with the Ministry of External Affairs issuing a Note Verbale to the Swiss Government to inform their position on the assignment of charges collected by IATA on behalf of AAI, the Ministry said.

"Air India continues to be a party to Devas Multimedia case in USA and Canada. The amounts garnished by IATA for the period prior to date of disinvestment are yet to be released by the Court," said the Minister in a written statement.

A 2005 satellite deal between Antrix Corporation — the commercial arm of the Indian Space Research Organisation (ISRO) – and Devas Multimedia Pvt Ltd, a start-up headquartered in Bengaluru was caught up in a legal tussle between the Indian government and foreign investors in Devas.

"The Antrix-Devas dispute arose from the agreement entered into on January 2005 by and between Antrix Corporation Limited and Devas Multimedia Private Limited, India (Devas). The Hon'ble Supreme Court vide its judgment dated 17.01.2022 upheld the decisions of the National Company Law Tribunal (NCLT) dated 25.05.2021 and 08.09.2021, and ordered the winding up of Devas," the reply stated.

The Supreme Court upheld a May 25, 2021 order of the National Company Law Tribunal (NCLT) to liquidate Devas on the ground that the firm was created under fraudulent circumstances. The order came even as three Mauritius-based investors and a German telecom major have approached federal courts in the United States to seize assets linked to the Indian government such as those of Air India.

The Ministry noted that since a serious case of fraud and corruption is involved, the awards are being contested worldwide both at the seat of the Awards and also other enforcing Courts. The government of India has engaged Counsels in all jurisdictions and has filed appeals against the garnish orders.

As part of the Devas-Antrix deal, they signed an “Agreement for the Lease of Space Segment Capacity on ISRO/Antrix S-band spacecraft by Devas Multimedia Pvt Ltd” on January 28, 2005, a month after Devas was incorporated in Bengaluru in December 2004 by two former ISRO employees. Under the deal, ISRO would lease to Devas two communication satellites (GSAT-6 and 6A) for 12 years for Rs 167 crore. The deal progressed smoothly for six years before it was terminated by the UPA government on February 25, 2011, to use the S-band for security purposes. The government's decision came in the midst of the 2G scam and allegations that the Devas deal involved the handing over of a communication spectrum valued at nearly Rs 2 lakh crore in unlawful manner.

Following this, Devas and its foreign investors approached various international tribunals and courts seeking compensation. Devas was awarded compensation of $1.2 billion by an International Chamber of Commerce tribunal on September 14, 2015, Deutsche Telekom was awarded $ 101 million plus interest by the Permanent Court of Arbitration in Geneva on May 27, 2020, and the Mauritius investors were awarded $111 million by the UN Commission on International Trade Law tribunal on October 13, 2020.