Supreme Court stays International Award and directs ISRO's Antrix to pay $1.2 Billion to Devas Multimedia

Supreme Court stays International Award and directs ISRO's Antrix to pay $1.2 Billion to Devas Multimedia

The Supreme Court on 4 November, 2020 stayed the execution of an International award passed by a United States (US) court asking Antrix Corporation (hereafter Antrix), the commercial arm of ISRO, to pay compensation of USD 1.2 billion to Devas Multimedia (hereafter Devas), a Bengaluru-based startup, for cancelling a 2005 satellite deal.

A bench headed by Chief Justice S A Bobde and comprising Justices L Nageswara Rao and Indu Malhotra stayed the execution of the international award, which was passed by the US court.

The US District Court of the Western District of Washington, had ordered Antrix to compensate Devas to the extent of $562.5 million along with the interest — totalling to about $1.2 billion.

The background of the case is that two companies – Antrix and Devas had entered into an agreement in 2005to use two satellites (GSAT-6 and GSAT-6A) for high-speed beaming of video content on mobile devices on the S-band spectrum. However, the contract was cancelled.

Thereafter, Devas Multimedia filed a case against Antrix for damages it suffered owing to the cancellation of the agreement. Antrix preferred an application under Section 9 of the Arbitration and Conciliation Act 1996 before the City Civil Court at Bengaluru.

Devas filed a Section 9 application before the Delhi High Court for securing the award.

Antrix also filed a petition under Section 34 of the Arbitration Act before the Bengaluru City Civil Court to restrain Devas from enforcing the arbitral award.

A Division Bench of the Delhi High Court rejected the plea by Devas and directed the case to proceed before the Bengaluru court. However, the Section 34 proceedings at Bengaluru was stayed by the Supreme Court in 2018.

In September 2018, a US District Court said that three separate international tribunals and nine different arbitrators had found the termination of the Devas-Antrix agreement to have been wrong. Devas had said that one of the tribunals in its findings had noted it to be a clear breach of simple good faith by India.

The US District Court stayed the execution for a period of about one year to enable the parties to settle the matter. This stay was, however, lifted in September 2020 and the arbitral award was confirmed in favour of Devas.

The Supreme Court stated that it was keeping the arbitral award in abeyance and also transferred the Section 34 proceedings from the Bengaluru court to the Delhi High Court.

However, the three-judge bench stated that they consider it "highly iniquitous to permit the party to execute an award without the objections under section 34 of the Act to the Award itself being heard."

The Court observed that it considered it highly iniquitous to permit Devas Multmedia Ltd. to go ahead with execution without the objections it had filed under section 34 of the Act to the Award.

Further, the Court transferred the application filed by Antrix Corporation under Section 34 before the Bangalore Civil Court to Delhi High Court for consideration thereby holding that Delhi High Court would be the appropriate forum for considering the lis between parties.

The Supreme Court also said that the execution of award will remain in abeyance till the Delhi High Court decides the plea for stay.