US court orders ISRO's Antrix to pay $1.2bn compensation
In a major setback for Antrix Corporation, the commercial arm of ISRO, a federal court in the US has directed it to pay a compensation of $1.2 billion to Bengaluru-based start-up, Devas Multimedia, for canceling a 2005 satellite deal. Antrix had signed a deal with Devas in January 2005 for building and launching two satellites to provide multimedia services using the space band spectrum.
Antrix asked to pay compensation as per ICC arbitration award
The US federal court for the Western District of Washington asked Antrix to pay $1.2 billion to Devas as per the arbitration award of the International Chamber of Commerce (ICC). ICC gave the arbitration award in 2015 after the commercial arm of the Indian space agency canceled its 2005 deal with the Bengaluru-based start-up launched by former ISRO officials and American businessmen.
ISRO's commercial arm to pay compensation along with interest
In his October 27 order, Judge Thomas S Zilly, the US District Judge of the Western District of Washington, ruled that Antrix pay a compensation amount of $562.5 million to Devas, along with the related interest rate, which totals $1.2 billion.
A little about the Antrix-Devas deal
In January 2005, Antrix had signed an agreement with Devas for leasing S-band transponder on two ISRO satellites: GSAT-6 and GSAT-6A. The S-band spectrum lies between the 2,000-4,000MHz frequency and isn't only scarce but also has enormous commercial value in high-speed terrestrial mobile communication. However, in February 2011, the government terminated the agreement with Devas, citing the need for the S-band spectrum for security communications.
Devas commenced arbitration proceedings in June 2011
After Antrix terminated the 2005 deal in 2011, Devas approached several legal avenues and filed lawsuits. In June 2011, the Bengaluru-based start-up began arbitration proceedings in accordance with the ICC's Rules of Arbitration. Later, in August 2011, Antrix filed a petition with the Supreme Court of India. The SC, however, ruled in May 2013 that it wouldn't interfere with proceedings initiated under the ICC.
Antrix wrongfully terminated the agreement: ICC panel
In September 2015, an ICC panel concluded that Antrix wrongfully terminated the deal and awarded Devas $562.5 million plus interest. Later, in the same month, Devas filed a petition in the Delhi HC to enforce the ICC's award. However, Antrix challenged the award in a Bengaluru court in 2016. Finally, in September 2018, Devas approached the US court seeking enforcement of the ICC award.