The Supreme Court has upheld the decision of the National Company Law Appellate Tribunal (NCLAT) to wind up Bengaluru-based Devas Multimedia. This is the first legal victory for Antrix Corporation, the Centre-owned company under the administrative control of the Department of Space, in its decade-long tussle with Devas.
“We do not know if the action of Antrix in seeking the winding up of Devas may send a wrong message to the community of investors. But allowing Devas and its shareholders to reap the benefits of their fraudulent action, may nevertheless send another wrong message, namely that by adopting fraudulent means and by bringing into India an investment in a sum of Rs 579 crore, the investors can hope to get tens of thousands of crores of rupees, even after siphoning off Rs 488 crore,” the bench said.
Here is a timeline of events of the Antrix-Devas deal:
January - Antrix Corporation signs a deal with Devas Multimedia to lease out 90 percent of the transponders on GSAT-6 and GSAT-6A to Devas for $190 million. Bundled in the deal was 70 MHz of spectrum, which would have had a theoretical value of $27 billion if sold at the same rate as the 2010 3G spectrum auction.
February - Antrix scraps the deal after ISRO insiders revealed the particulars of the deal, which were hidden from the Cabinet and the Department of Space.
June - After its investor Deutsche Telekom demands damages from Antrix over the sudden annulment of the deal, the company approaches the International Chamber of Commerce (ICC) to start arbitration proceedings.
August - Antrix files a petition with the Supreme Court stating that ICC did not have jurisdiction over the matter.
The Supreme Court said it cannot interfere in ICC proceedings once it has started.
ICC panel concludes that Antrix wrongfully annulled the deal after Antrix designated not to choose an arbitration representative. The company is ordered to pay damages with interest. Devas approaches Delhi HC to enforce the award while Antrix challenges the award in a Bangalore court. The Delhi HC single judge bench allows Devas to claim interim relief before an appeal to a higher bench sees the previous order being scrapped.
A US court asks Antrix to pay up the damages after Devas investors approached it for enforcement of the award. The investors had approached the US court to claim ISRO assets that were being held in Virginia in enforcement of its previous arbitration award. The Supreme Court stays the US Court decision and asks Delhi HC to hear arguments from Antrix against the enforcement of the award.
Antrix approached the Bangalore bench of the NCLT against Devas after being advised by the Ministry of Corporate Affairs. NCLT passes a judgment to wind up Devas on account of fraud during the original deal. The NCLAT upholds the same judgment leading to Devas to contest the judgment with the Supreme Court.
Canadian Court allows Devas to seize Air India assets to claim compensation as part of arbitration award but reserves judgment before lifting the freeze on seizure of AI assets lying with the IATA early in 2022.