[Antrix-Devas deal] Delhi High Court sets aside arbitral award directing Antrix to pay US$ 562 million, interest to Devas

The Delhi High Court on Monday set aside an arbitral award passed by the International Chamber of Commerce which had directed Antrix Corporation Limited (commercial arm of ISRO) to pay damages of over US$ 560 million along with interest to Devas Multimedia Private Limited [Antrix Corporation Ltd v Devas Multimedia Private Limited]..Justice Sanjeev Sachdeva held that the award dated September 14, 2015 suffered from patent illegalities and fraud while being in conflict with the public policy of India..The judge said that the Supreme Court, in its January 2022 judgment, had already held that the very seeds of the commercial relationship between Antrix and Devas were a product of fraud perpetrated by Devas and thus every part of the plant that grew out of those seeds, such as the agreement, the disputes, arbitral awards were all infected with the poison of fraud.“The basic notions of morality and justice are always in conflict with fraud and that allowing Devas and its shareholders to reap the benefits of their fraudulent action, would send another wrong message namely that by adopting fraudulent means and by bringing into India an investment in a sum of ₹579 crores, the investors can hope to get tens of thousands of crores of rupees, even after siphoning off INR 488 crores,” the Court said..Justice Sachdeva added that the findings returned by the apex court also established that the award was antithetical to the fundamental policy of Indian law, as it was contrary to the national economic interests and violated the Foreign Investment Promotion Board (FIPB) policies and Prevention of Money Laundering Act (PMLA)..The Court was dealing with a petition under Section 34 of the Arbitration and Conciliation Act, 1996 seeking setting aside of the arbitral award of September 14, 2015 passed by the arbitral tribunal constituted by the International Chamber of Commerce (ICC) allowing the claim of Devas Multimedia Private Limited, and directing Antrix to pay more than US$560 million to it.Devas is a Bengaluru-based start-up owned by Mauritian and US firms. It was stated to be established by two people, one being a former employee of ISRO, with a share capital of ₹1,00,000 to pursue digital multimedia services.Antrix and Devas entered into an agreement by which Antrix agreed to build, operate, and launch two satellites and lease spectrum capacity on those satellites to Devas. Devas had to utilise this bandwidth to provide multimedia services across India.However, the agreement was terminated by Antrix in 2011 due to changes in policy decisions. A legal battle between the parties ensued. On September 14, 2014, the ICC rendered an award in favour of Devas.Antrix argued that the contract from which the arbitral award arose was wholly vitiated due to acts of corruption, fraud and criminality committed by the erstwhile management of Antrix and Devas.On a petition filed by Antrix, the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) had ordered the winding up of Devas on grounds of fraud. Devas challenged the NCLAT judgment before the Supreme Court which, on January 17 this year, upheld the said judgment declaring that Devas was formed for fraudulent and unlawful purposes..Additional Solicitors General (ASGs) N Venkataraman and Chetan Sharma along with Advocates V Chandrashekar, Ajay Bhargava (Partner at Khaitan & Co), Arvind Ray, Karan Gupta, Varsha S Suneja and Ram Narayan appeared for Antrix.Senior Advocate Maninder Singh along with Advocates A Sebastian, Prabhas Bajaj, Ajay Sabharwal, Angelika Awasthi and Prashant Jain appeared for official liquidator of Devas.Senior Advocate Suhail Dutt along with Advocates Anuradha Dutt (Partner at DMD Advocates), Lynn Pereira, Ekta Kapil, Priyanka MP, Chaitanya Kaushik, Ambar Bhushan, Shivangi Sud, Azhar Alam and Sankalp Goswami represented Devas Employees Mauritius Pvt Ltd..[Read Judgment]