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Air India Targeted by Devas Shareholders for Enforcement of Arbitration Awards Against India

Filing in U.S. District Court for the Southern District of New York Follows Similar Action by Cairn Energy

Devas Promises to Pursue Action against India “in Courts Around the World”

June 28, 2021 – Today, shareholders and investors of Devas Multimedia have filed action in the U.S. District Court for Southern District of New York pursuing assets of Air India to satisfy an arbitration award owed by India to Devas’s shareholders. British firm Cairn Energy filed a similar action on May 17 in the same federal court to satisfy a different arbitration award.

India has refused to pay either company the compensation they are owed for the country’s breach of investment treaties, in defiance of multiple international arbitration rulings and contrary to India’s own treaty commitments.

Matthew D. McGill of Gibson Dunn & Crutcher LLP, lead counsel for a number of the shareholders of Devas Multimedia Private Ltd., made the following statement:

“Given the extraordinary lengths to which India has gone to evade this award, we deem it urgent and essential to begin identifying and securing assets which may be used to facilitate payment.

“The Devas shareholders have received no response to an offer to negotiate with the Indian government, pending filing of a new arbitration action for damages resulting from the contrived and unsupported prosecution of Devas in Indian courts.

“Devas will continue to pursue its rights and enforcement actions against India in courts around the world, regardless of the Indian government’s conduct against Devas within its own borders.”

Jay Newman, an internationally recognized expert in sovereign debt enforcement and advisor to Devas shareholders added:

India’s efforts to evade payment to Devas, a company backed by many of the world’s most prominent telecom innovators, goes far beyond my previous experience of malfeasance by sovereign governments. Today’s action by Devas is the first of many steps we will take to enforce our arbitration award, and ensure the Indian government pays what is rightfully owed to Devas’s shareholders.”

Devas’s Shareholders’ Filing in SDNY

Devas’s Mauritian shareholders seek the following:

  1. To declare that Air India is the alter ego of India and legally indistinct from the Indian government itself;
  2. Find that Air India shall be jointly and severally liable for any judgment entered against India; and
  3. Allow execution, attachment, and other orders as appropriate, including orders for injunctive relief, requiring Air India to satisfy the liability owed to Devas’s shareholders.

Bilateral Investment Treat (“BIT”) Award Enforcement Actions

Devas’s shareholders seek a judgment holding Air India jointly and severally liable to satisfy the money judgment that they are owed based upon a petition pending in the U.S. District Court for the District of Columbia to confirm an arbitration award issued on October 13, 2020 (the BIT Award) against the Indian government.

The BIT Award as to Quantum was made by the UNCITRAL tribunal in The Hague on October 13, 2020 ordering the Government of India to pay the Mauritian shareholders of Devas damages totaling approximately US$160 million including accrued interest. In January 2021, the Mauritian shareholders of Devas sought confirmation of the BIT Award in the U.S. District Court for the District of Columbia. India’s response is due by July 27, 2021.

The BIT Award for Devas’s shareholders followed an ICC Award for $672 million rendered to Devas itself in September 2015 over the unlawful termination of the contract. The ICC Award was confirmed by the U.S. District Court for the Western District of Washington in October 2020, days after the BIT Award was issued to the shareholders who filed the action today in New York. On June 9, 2021, these same Devas shareholders joined as full parties in the Seattle federal court to enforce the ICC Award.

About Devas 

Devas and its affiliates are currently owed more than US$1.5 billion by the Government of India, as confirmed by three separate independent international arbitration tribunals. The rulings came after the Indian Government’s decision to illegally expropriate and breach Devas’s due process and treaty rights by improperly terminating the company’s contract with Antrix, the marketing arm of India’s national satellite industry.

In the early 2000s, global pioneers and investors in satellite communications conceived the idea of Devas Multimedia Pvt. Ltd.  In January 2005, Devas entered into an Agreement (the ‘Devas Agreement’) with Antrix and its parent the Indian Space Research Organisation (ISRO) to build out an innovative hybrid satellite and terrestrial communications service throughout India. This system would have delivered cutting-edge digital multimedia broadcasting service and mobile broadband across India using the S-band spectrum. The project would have brought significant economic and societal advancement for the lives of hundreds of millions of people by ensuring access to high-speed communications and the internet. In February 2011, without warning and alleging only a force majeure of its own devising, the Government of India abruptly and illegally terminated the agreement with Devas.