India loses arbitration case at The Hague

BENGALURU: India has lost the arbitration case in an international tribunal over its space marketing agency Antrix Corp annulling a contract with city-based private multimedia firm Devas and may have to fork out millions of dollars in damages.

A Permanent Court of Arbitration (PCA) tribunal based in The Hague ruled that the Indian government had acted “unfairly” and “inequitably” in cancelling the contract involving use of two satellites and spectrum.

The tribunal has found that the Indian government’s actions in annulling the contract and denying Devas commercial use of S-band spectrum constituted an expropriation, Devas Multimedia Private Ltd. said on Tuesday.

In its ruling on Monday, the PCA tribunal also found that India breached its treaty commitments to accord fair and equitable treatment to Devas’s foreign investors, the company said in a statement.

The PCA regularly administers cases involving states, including investment treaty claims brought under arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL). Indian Space Research Organisation(ISRO) officials here said they were yet to get details of the ruling. The deal had cost five senior ISRO scientists, including its former chairman G Madhavan Nair, their government jobs.

The ruling is the second by an international tribunal arising out of the cancellation of the DevasAntrix contract.

The unanimous decision included the arbitrator appointed to the tribunal by India, Devas said.

In September 2015, in a jolt to Antrix, the commercial arm of ISRO, the International Chamber of Commerce’s (ICC) arbitration body International Court of Arbitration had asked it to pay damages worth $672 million (Rs4,432 crore then) to Devas Multimedia for “unlawfully” terminating the deal five years ago on grounds of national security.

The Tribunal then had noted that Antrix had no legal justification to terminate the agreement and that Dr KR 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.

CCS had annulled the deal based on the recommendation of the Space Commission on the ground that it was not in the security interests of the country. “It’s unfortunate that International court has come to such a conclusion. What we have to do this time is to pull up all our resources and fight out this issue in the appellate court, so that we can control the damage,” Nair said.