US court asks Antrix to pay USD 1.2 billion compensation to Bengaluru start-up

A US court has asked Antrix Corporation, commercial arm of Indian 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 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 latter planned to use to offer hybrid satellite and terrestrial communication services throughout India.

agreement was terminated by Antrix in February 2011. Over next several years, Devas approached various legal avenues in India. This included 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 related interest rate amounting to a total of USD 1.2 billion.

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

Antrix, in vember 2018, h sought dismissal of lawsuit citing jurisdictional issues.

court, however, asserted that it h jurisdiction over issue, but stayed matter for one year and asked two to file a joint status report by April 15, 2020.

On July 16, 2020, both Devas and Antrix filed instant motion, a Joint Status Report in which y disputed wher court should lift or extend stay, and, if latter, wher Antrix be required to post security.

Devas, according to submissions, has argued that US court has jurisdiction over se cases, as Antrix engs in business in this district and across United States.

Antrix and flight Industries, which is hequartered in Seattle have an agreement to provide satellite launch services using India’s PSLV rocket.

Antrix and RBC Signals LLC, which is hequartered in Redmond, Washington have a worldwide agreement to provide communications services to satellite operators.

Antrix in 2018 launched a satellite for Redmond, a Washington-based Planetary Resources.

Antrix agreed in 2015 to launch two satellites for Coloro-based PlanetiQ. Antrix is contracted with DigitalGlobe, which has hequarters in Coloro and or locations in Florida, Virginia and Washington to procure certain satellite data, which is n distributed by Indian Research Organisation's National Remote Sensing Centre.

Devas said that after initial signing of agreement, two companies performed in good faith for five years. Among or things, in May 2009, Dr Appanna Bhaskarnaryana, Director of Satellite Communications Programme Office of ISRO, spent four to five weeks in US with Devas personnel meeting with Hughes Networks, Sirius XM SkyTerra, Qualcomm and ICO rth America to understand techlogies used by, and operation of, hybrid satellite-terrestrial operators providing telecommunications services.

Devas subsequently conducted experimental trials in India (attended by Antrix officials, including company's n chairman), Chengdu and Beijing in China, and Stuttgart in Germany, which successfully demonstrated hybrid satellite-terrestrial systems and end-user terminals that Devas h developed in conjunction with a global network of leing techlogy players such as Alcatel Lucent, it said.

On February 25, 2011, Antrix issued a termination tice to Devas, which among or things stated that policy decision was of central government, acting in its sovereign capacity is event of force majeure, which was an occurrence on February 23, 2011.

“ scope and duration of said decision cant be anticipated. It is likely to be indefinite. It is t possible for Antrix to take any effective step to resume obligations under agreement,” Antrix said.

Devas disputed Antrix’s repudiation of agreement and sought to conduct discussions among senior manment as contemplated by that agreement.

In June 2011, Devas commenced arbitration proceedings under Rules of Arbitration of International Chamber of Commerce.

Antrix initially refused to participate in arbitration and obtained an injunction from Indian Supreme Court enjoining arbitration. After one year, Supreme Court lifted injunction, allowing arbitration to proceed. reafter, Antrix participated fully in arbitration.