seize

Canadian Investors Seize Indian Assets – Free PDF Download

The News

  • In two separate orders on November 24 2021 and 21 December 2021, Devas shareholders had received permission from the Quebec Superior Court to seize assets of AAI and AI held by IATA in connection with the arbitration awards it won for wrongful cancellation of its deal with ISRO’s arm, Antrix, in 2011.
  • Now, in a partial relief for India, court in Canada has said that investors of Devas Multimedia can seize only 50% of Air India’s (AI) assets held by the International Air Transport Association (IATA).
  • It has also quashed the order permitting seizure of funds belonging to the Airports Authority of India (AAI).

The Antrix Devas Deal

What followed the deal?

What followed the deal?

  • After the Devas-Antrix deal was cancelled in 2011, Devas Multimedia Private Limited and its shareholders won three arbitration awards at international tribunals.
    • First Award 2015 : By the International Chamber of Commerce (ICC) Tribunal, seated in New Delhi. Devas was awarded U.S. $562.5 million in damages plus 18% interest per annum. Antrix, has filed a petition to set aside the ICC award which is currently under adjudication before the Delhi High Court.
    • Second Award 2016 : PCA seated at Hague under India-Mauritius Bilateral Investment Treaty (BIT) found India liable for breaching its obligations. In 2020, it awarded Devas shareholders over U.S. $111 million plus interest as compensation.
    • Third Award 2020: PCA seated at hague under the India-Germany Bilateral Investment Treaty, awarded Deutsche Telecom (Shareholder in Devas) more than $132 million plus interest.

What followed the deal?

  • Despite the compensation awarded to Devas shareholders in multiple arbitration verdicts, India has not paid any money yet and challenged the awards multiple times.
  • Devas says that in 2020 the BJP government agreed to a negotiated global financial settlement, but walked away from it and until India returns to the negotiating table, it has no alternative but to move against India’s assets globally.
  • Meanwhile, in January 2021, after a plea from Antrix, the National Company Law Tribunal ordered winding up of Devas on grounds of being fraudulent, which was upheld by NCLAT in September, 2021. NCLAT has also held the Antrix-Devas agreement to be illegal. Devas has moved the Supreme Court and its appeals are pending.

The current case

  • The three investors — CC/Devas Mauritius, Telcom Devas Mauritius and Devas Employees Mauritius Pvt Ltd had moved the Montreal district court in 2021 for seizure of assets of the Indian government to enforce an International Trade Law tribunal order which asked Antrix to pay $111 million as compensation for the cancellation of a Devas- Antrix satellite deal that was signed in 2005.

The News

  • In two separate orders on November 24 2021 and 21 December 2021, Devas shareholders had received permission from the Quebec Superior Court to seize assets of AAI and AI held by IATA in connection with the arbitration awards it won for wrongful cancellation of its deal with ISRO’s arm, Antrix, in 2011.
  • Now, in a partial relief for India, court in Canada has said that investors of Devas Multimedia can seize only 50% of Air India’s (AI) assets held by the International Air Transport Association (IATA).
  • It has also quashed the order permitting seizure of funds belonging to the Airports Authority of India (AAI).

What next?

  • Options for India
    • Accept PCA awards and pay compensation
    • Challenge Canada court order & other orders
    • Negotiate separate deal with Devas

But I have a doubt..!!

How can a Canadian court rule that Indian assets in Montreal can be seized?

  • State immunity is a well-established principle of international law.
  • However, there is no international legal provision providing state immunity in the municipal legal systems of different countries.
  • This loophole has been utilized by Devas. Canada follows a concept of “restrictive immunity” which means a foreign State is immune only for sovereign functions.
  • AAI and AI are being targeted because they are Indian public sector entities with overseas assets. They are assumed as alter ego for the government of India.

 

 

 

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