In Petition(s) for Special Leave to Appeal (C) No(s). 22622/2023 -SC- Major setback for Devas in long-running legal battle with Antrix; Supreme Court upholds Delhi High Court order setting aside $562.5 million arbitral award
Justice S. Ravindra Bhat & Justice Aravind Kumar [06-10-2023]

Read Order: Devas Employees Fund US LLC V. Antrix Corporation Limited & Ors

Chahat Varma

New Delhi, October 31, 2023: The Supreme Court has dismissed Devas Multimedia's special leave petition against the Delhi High Court's order setting aside a $562.5 million ICC arbitral award in their favour. This is a major setback for Devas in their long-running legal battle with Antrix, the commercial arm of the Indian Space Research Organisation (ISRO).

The division bench of Justice S. Ravindra Bhat and Justice Aravind Kumar said, “This Court is of the opinion that the impugned order does not call for interference.”

In this case, Antrix, had entered into an agreement with Devas, a Mauritius-based company, to lease satellite capacity for digital multimedia broadcasting services in India. The agreement was terminated by Antrix, citing a government policy against providing orbital slots in the S-Band for commercial activities. Following this termination, Devas initiated arbitration proceedings against Antrix under ICC rules, seeking damages for breach of the agreement.

In 2015, an ICC arbitral tribunal awarded Devas $562.5 million in damages. Following the ICC Award, Antrix filed a petition under Section 34 of the Arbitration Act to challenge it. Additionally, Antrix sought to wind up Devas under the Companies Act, 2013, on grounds of fraudulent incorporation and conduct. The National Company Law Tribunal (NCLT) approved the winding-up petition, citing fraudulent formation and conduct by Devas. The Supreme Court also upheld the NCLT's decision to wind up Devas, based on the fraudulent and unlawful purpose of its incorporation and fraudulent conduct.

Thereafter, the Division Bench of the Delhi High Court in Devas Employees Mauritius Pvt. Ltd v. Antrix Corporation Limited & Ors [LQ/DelHC/2023/1546], had found that Devas had engaged in fraudulent conduct from its very incorporation, extending to the entire Devas Agreement and subsequent actions. The nature of the fraud was deemed so severe and complex that it led to the company's winding up under the Companies Act and a criminal investigation into the company and its officers. It was held that the Devas Agreement itself was considered to be obtained through document fabrication and misrepresentation, constituting a clear case of fraud.

Thus, the Division Bench had concluded that there was no error in the Single Judge's decision to set aside the ICC Award on grounds of fraud and conflict with India's public policy.