By LE Desk
June 30, 2021: A group of foreign investors in the start-up Devas Multimedia, who are seeking to enforce a $160-million arbitration compensation award over a failed 2005 satellite deal with the Indian Space Research Organisation’s (ISRO) commercial arm Antrix Corporation, have moved a US federal court seeking to take over the assets of Air India to enforce payments.
The group of foreign investors — CC/Devas Mauritius, Telcom Devas Mauritius, and Devas Employees Mauritius Pvt Ltd — approached the Southern District of New York court on Monday with a plea to declare Air India an alter ego of India, and to allow attachment of the airline’s properties in order to enforce payment of compensation awarded by an international tribunal in favour of the investors, reported The Indian Express.
The Mauritius-based investors in Devas Multimedia were awarded a $160-million compensation by a tribunal of the UN Commission on International Trade Law on October 13, 2020, following an arbitration process over alleged violations by the Indian government of a bilateral investment treaty with Mauritius. Earlier this year, the investors had moved a US federal court seeking enforcement of the arbitration award.
The Mauritius investors have followed in the footsteps of the UK firm Cairn Energy in seeking to get Air India declared an alter ego of India in order to pursue assets of the national carrier as a strategy to enforce arbitration awards against the government, The Indian Express said. Cairn Energy’s complaint was filed in the same court on May 17.
The Mauritius investors have contended that Air India should be made jointly liable “for debts and obligations of India itself”, according to the court filing. The complaint says A-I should be made liable for payments due to Devas shareholders on account of the UNCITRAL arbitration award.
The move comes even as a Bengaluru bench of the National Company Law Tribunal ordered liquidation of Devas Multimedia on May 26 on the grounds that the firm was created fraudulently. The Enforcement Directorate and the CBI are pursuing cases of money laundering and corruption against Devas over the 2005 deal.