Quick Summary
- The arbitral award directing ISRO’s antrixto pay USD $ 562 million with interest to Devas as damages for unlawfully terminating a deal.
- Justice Sanjeev Sachdeva held that the award dated in 2015 suffered from patent illegalities and fraud and conflicted with the public policy of India.
- He allowed the petition filed under the Arbitration and Conciliation Act setting aside the order passed for the award.
- The judge questioned the morality and justice of this conflicting case of Antrix Corporation Ltd v Devas Multimedia Private Limited.
- The commercial relationship between Antrix and Devas were induced with fraud.
- The seeds of this fraud were perpetrated by Devas only and hence every branch connected to this including the dispute, the agreement, arbitral awards, etc can be said are poisoned with 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.(bar bench, n.d.)
- Devas is a Bengaluru-based start-up owned by Mauritian and US firms. It was established by two people, one being a former employee of ISRO, with a share capital of ₹1,00,000 to pursue digital multimedia services.
- The two agreed to build, operate, and launch two satellites and lease spectrum capacity on those satellites to Devas.
- However, the policy terminated due to change is policy decisions.
- Antrix claimed that it was due to the commercial fraud by Devas.
- The high court, in its 87-page judgement, allowed the objections filed by petitioner Antrix under Section 34 of the Arbitration and Conciliation Act, further setting aside the arbitral award order.
- The findings by the apex court also established that the award was contrary to the fundamental policy of Indian law and the national economic interests
- It also violated the Foreign Investment Promotion Board (FIPB) policies and Prevention of Money Laundering Act (PMLA).
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