In a setback to India, an worldwide arbitration court has awarded $672 million (Rs.4,434 crore) damages to Devas Multimedia Services Ltd for the cancellation of a commercial satellite contract by the Indian space agency arm Anrix Corporation in 2011.
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“The ICC award against Antrix in the Devas case is shocking”, Antrix said in a September 30 statement. The ICC tribunal award in inclusive of an interest at 18% per annum on that sum until the award is fully paid.
“Devas is hopeful that Antrix will now live up to its legal obligations and pay the award so that this dispute that arose during the prior government can be brought to a swift close, ” it added. The government also criticized what it said was a sweetheart deal that was awarded without competition to Devas.
According to the contract signed in January 2005, Devas was to lease 70 MHz of S-band spectrum from two satellites that were to be launched by Isro. Antrix is liable to pay damages of Dollars 672 million to the company.
Devas meant to use the spectrum to provide audio, video and broadband services using a mix of satellite and terrestrial technology. The report alleged that a flawed 2G spectrum allocation process followed by the then United Progressive Alliance (UPA) government had led to a Rs1.76 trillion loss (in notional terms) to the exchequer.
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In its findings, the tribunal had noted that Antrix had no legal justification for terminating the agreement and that Dr K R Radhakrishnan, who at the time of annulment, was Secretary, Department of Space and Chairman of ISRO, Antrix and the Space Commission, could have prevented the Cabinet Committee on Security (CCS) from approving the annulment. There was no dialogue with representatives of Devas before cancelling the contract, and all actions taken by Isro between 2010 and 2011 (the deal was called off in February 2011 on grounds that it was not in the security interests of the country) are shrouded in mystery.
