US court asks Antrix to pay $1.2 billion compensation to Bengaluru startup

A US court has asked Antrix Corporation, the commercial arm of Indian Space Research Organisation, to pay compensation of USD 1.2 billion to a Bengaluru-based startup, Devas Multimedia, for cancelling a satellite deal in 2005.

As per the agreement in January 2005, Antrix agreed to build, launch and operate two satellites and to make available 70 MHz of S-band spectrum to Devas, which the latter planned to use to offer hybrid satellite and terrestrial communication services throughout India. The agreement was terminated by Antrix in February 2011.

Over the next several years, Devas approached various legal avenues in India. This included the Supreme Court, which directed for a tribunal. In his order dated October 27, Judge Thomas S Zilly, US District Judge, Western District of Washington, Seattle, ruled that Antrix Corporation pay a compensation of USD 562.5 million to Devas Multimedia Corporation and the related interest rate amounting to a total of USD 1.2 billion.

In its lawsuit filed in the US District Court, Western District of Washington in September 2018, Devas Multimedia said three separate international tribunals and nine different arbitrators have found the termination of the Devas-Antrix agreement to have been wrongful, with one of the tribunals describing it as “conduct ‘which shocks, or at least surprises, a sense of juridical propriety,’” and another finding it to be “a clear breach of simple good faith” by India.

Antrix, in November 2018, had sought the dismissal of the lawsuit citing jurisdictional issues. The court, however, asserted that it had jurisdiction over the issue, but stayed the matter for one year and asked the two to file a joint status report by April 15, 2020.

On July 16, 2020, both Devas and Antrix filed the instant motion, a Joint Status Report in which they disputed whether the court should lift or extend the stay, and, if the latter, whether Antrix be required to post security. Devas, according to submissions, has argued that the US court has jurisdiction over these cases, as Antrix engages in business in this district and across the United States. TOI

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