ISRO Commercial Arm Antrix to pay $1.2 Billion to Bengaluru Startup Devas, rules the US Court

When a few ISRO ex-employees began Devas Multimedia; they never in their dream thought that ISRO's Commercial Arm Antrix would cheat them. "Cheat" may be a strong word, but in this case, it is the right one. In 2005, Devas Multimedia asked Antrix to lease two communication satellites; for 12 years at a cost of Rs 167 crore. In return, they would also provide multimedia services to mobile platforms in India. This would be with the space band or S-band spectrum transponders on ISRO’s GSAT 6 and 6A satellites. This was built at a cost of Rs 766 crore by ISRO.

But then, Antrix backed out of the deal; the UPA Government annulled the startup on grounds of 2G scam. Later, ED slapped a penalty of approx 1600 crores for "illegal foreign investment of around Rs 578 crores". So in all, it was not a good time for Devas. As for the ISRO S-band deal, Devas reported to over 9 jurisdictions that the case breaks good faith.

Finally, in October 2020, a federal court in the United States has asked Antrix Corporation to pay Devas Multimedia, compensation amounting to $1.2 billion for cancelling a January 2005 deal.

The complete ruling

The US federal court for the Western District of Washington confirmed an arbitration award made by the ICCon September 14, 2015, in favour of Devas Multimedia — on account of the government cancelling the 2005 satellite deal in February 2011 by citing the need for usage of the S-band spectrum for secure communications. Last year, the US court had imposed a five-year stay on proceedings to await progress in cases filed over the matter in Indian courts.

“The petition to confirm a foreign arbitral award is granted,” US federal court Judge Thomas S Zilly said in an 18-page order issued on Tuesday. According to the order, “full amount of the award – $562.5 million – together with pre-award simple interest at the rate of three-month USD LIBOR +4%, from February 25, 2011, to the date of the award, September 14, 2015 ($672,791.593.75)” is the compensation that Antrix Corporation has to pay Devas Multimedia for cancellation of the 2005 deal.

Besides, the US court has announced the CG entity pay simple interest at the rate of 18 PCPA on award amount. This should be “from the date of the award” September 14, 2015, “to the date that judgment”. The amount totals to $331,787.64 per day. Further, it has asked to file any objections to the amount on or before November 3.