Devas-Antrix deal

Devas-Antrix deal

Subject – Economy

Context – A 2005 satellite deal between Antrix Corporation — the commercial arm of the Indian Space Research Organisation (ISRO) – and Devas Multimedia Pvt Ltd, a start-up headquartered in Bengaluru, is at the heart of a global legal tussle between the Indian government and foreign investors in Devas.

Concept –

• A 2005 satellite deal between Antrix Corporation — the commercial arm of the Indian Space Research Organisation (ISRO) – and Devas Multimedia Pvt Ltd, a start-up headquartered in Bengaluru, is at the heart of a global legal tussle between the Indian government and foreign investors in Devas.
  • The tussle is fallout of the cancellation of the deal in 2011 by the then UPA government citing requirement of satellite spectrum allotted to Devas for security purposes.
• Supreme Court upheld a May 25, 2021 order of the National Company Law Tribunal (NCLT) to liquidate Devas on the ground that the firm was created under fraudulent circumstances.

What was the Devas-Antrix deal?

• They signed an “Agreement for the Lease of Space Segment Capacity on ISRO/Antrix S-band spacecraft by Devas Multimedia Pvt Ltd” on January 28, 2005, a month after Devas was incorporated in Bengaluru in December 2004 by two former ISRO employees.
• Under the deal, ISRO would lease to Devas two communication satellites (GSAT-6 and 6A) for 12 years for Rs 167 crore.
• Devas would provide multimedia services to mobile platforms in India using S-band transponders on the satellites, with ISRO leasing 70 MHz of S-band spectrum.
• The deal progressed smoothly for six years before it was annulled by the UPA government on February 25, 2011, following a Cabinet Committee on Security decision of February 17 to terminate the agreement to use the S-band for security purposes.
  • The government decision was taken in the midst of the 2G scam and allegations that the Devas deal involved the handing over of communication spectrum valued at nearly Rs 2 lakh crore for a pittance.
• Devas and its foreign investors approached various international tribunals and courts seeking compensation. Devas was awarded compensation of $1.2 billion by an International Chamber of Commerce tribunal on September 14, 2015.
  • The German investors claimed compensation for violation of an India-Germany bilateral investment treaty and the Mauritius investors for an India-Mauritius BIT, who were awarded compensation too.
• Supreme Court upheld a May 25, 2021 order of the National Company Law Tribunal (NCLT) to liquidate Devas on the ground that the firm was created under fraudulent circumstances.