The state-owned Antrix Corporation which markets the services of the Indian Space Research Organisation (ISRO) is a company owned by the Government of India and is entitled to rights accorded to foreign corporations in the United States in legal disputes, the company has stated in a filing in the US Supreme Court.
The filing on August 6 was in response to a plea by foreign investors in the Bengaluru satellite communication start-up Devas Multimedia for a ‘Writ of Certiorari’ or quashing of a US appeals court order disallowing the foreign investors from seeking a $ 1.2 billion compensation from Antrix over a failed 2005 satellite deal with ISRO-Antrix.
The foreign investors in Devas had approached the US Supreme Court on May 6, 2024, against a refusal by the US Court of Appeals for the Ninth Circuit to revisit its own August 1, 2023 order which said the investors cannot pursue the $1.2 billion compensation in the US since Antrix has no presence in the US and it enjoys immunity accorded to India as a sovereign entity.
On August 1, 2023, the US appeals court for the ninth circuit had ruled that a US district court “erred in exercising personal jurisdiction over Antrix Corp. Ltd., an Indian corporation, under the Foreign Sovereign Immunities Act (FSIA), because plaintiff (Devas) failed to establish that Antrix had the requisite minimum contacts for personal jurisdiction”.
In the US Supreme Court, the foreign investors in Devas have challenged the US appeals court order on the grounds that “no minimum contacts analysis is required for foreign states sued under the FSIA” in the US. The foreign investors are CC/Devas (Mauritius) Limited; Devas Multimedia America Inc; Devas Employes Mauritius Private Limited; and Telcom Devas Mauritius Limited.
In their filing on August 6, Antrix argued that it is “a state-owned corporation, not a foreign government. There is no need to consider whether foreign states are entitled to due process protections, either as a matter of statutory text or constitutional right, if Antrix—as a foreign corporation—is entitled to such protections anyway”.
“Antrix is a private Indian company owned by the Government of India. Antrix has provided space-related services since its incorporation in 1992, but Antrix is not an agent of the Indian Department of Space or the Indian Space Research Organisation (“ISRO”),” says the response.
Antrix has stated that its identity as a foreign corporation and not a foreign sovereign entity was not addressed by the US appeals court as well and the company is “entitled to due process even when they are not entitled to sovereign immunity under the FSIA”.
The Indian space firm has argued that it has no business interests in the US and as a result, the US courts cannot review and overrule a final judgment of the Supreme Court of India which upheld the setting aside of the $1.2 bn arbitration award.
Antrix has argued that “there is no longer an award to enforce because the Delhi High Court—the court of competent jurisdiction to determine the award’s enforceability—set it aside, a decision affirmed by the Indian Supreme Court”.
“It is unlikely Congress would abandon basic principles of comity and open U.S. courts to suits against foreign sovereigns in this way,” Antrix Corporation has argued in its counter.
The August 1, 2023 order of the US appeals court was a major relief for Antrix Corp and the Indian government which is fighting legal battles all over the world in connection with a 2011 decision of the UPA government to annul a satellite deal inked in 2005 by Devas Multimedia and Antrix for the launch of satellite digital multimedia services – akin to satellite internet services currently on the anvil for multiple service providers in India.
What foreign investors in Devas Multimedia have to say
The foreign investors have stated in their petition before the US Supreme Court that the court “should grant certiorari and confirm that no minimum contacts analysis is required for foreign states sued under the FSIA”.
The Ninth Circuit court’s order that a foreign entity must have minimum contact or presence in the US to be liable to suits “undermines Congress’s goal of creating a uniform body of law concerning the amenability of a foreign sovereign to suit in United States courts”, the foreign investors in Devas Multimedia have argued.
An International Chamber of Commerce arbitration tribunal awarded a $1.2 billion compensation to the start-up Devas Multimedia and its investors on September 14, 2015, for the cancellation of the Devas-Antrix satellite deal. The US District Court for the Western District of Washington confirmed the award on October 27, 2020.
The Antrix Corp went on appeal to the US appeals court against this order.
The US appeals court ruled on August 1, 2023, that Antrix Corp enjoyed immunity under the US Foreign Sovereign Immunities Act and that the district court of Washington had erroneously overruled this fact while confirming the arbitration award and allowing Devas Multimedia to register the compensation order in parts of the US to seize assets linked to Antrix Corp.
“It follows that if a foreign state is not a person and thus not entitled to a minimum contacts analysis through the Constitution, it is still entitled to a minimum contacts analysis through our reading of the FSIA. Thus, the district court erred in ignoring our precedents requiring it to conduct a minimum contacts analysis,” the US appeals court ruled.
The origin of the dispute
The UPA government annulled the 2005 Devas-Antrix satellite deal in February 2011 citing the requirement of space spectrum allocated for the satellite service for security needs. The deal was cancelled after it was cited as another instance of corruption under the UPA regime after the 2G telecom scam.
Under the failed 2005 Antrix-Devas deal, ISRO was supposed to lease two communication satellites for 12 years for Rs 167 crore to Devas Multimedia. The start-up was to provide multimedia services to mobile platforms in India using the space band or S-band transponders on ISRO’s GSAT 6 and 6A satellites built at a cost of Rs 766 crore by ISRO.
After the NDA government came to power in 2014, the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) began investigating the deal even as the foreign investors in Devas Multimedia approached various international tribunals seeking compensation for the failed deal.
Devas Multimedia was awarded $1.2 billion by an International Chamber of Commerce (on September 14, 2015); Deutsche Telekom was awarded a $101 million compensation by the Permanent Court of Arbitration in Geneva; and the Mauritius investors were awarded a $111 million by UNCITRAL.
The National Company Law Tribunal in India ordered the liquidation of Devas Multimedia on May 25, 2021, citing fraudulence in its creation, and this was upheld by the Supreme Court on January 17, 2022.
The CBI and ED are currently pursuing cases of money laundering and corruption against Devas and its officials. Former ISRO chairman G Madhavan Nair is among the accused in the CBI case.
