Devas Multimedia Pvt., a company seeking more than US$1.2 billion in international arbitration from India, has partnered with Cairn Energy Plc in an attempt to seize the assets of Air India Ltd. Devas claimed that the flagship airline was the “other self” of the Indian government and was responsible for sovereign debt, and filed a petition in New York, requiring Air India to pay the prescribed amount of its US properties, including aircraft, cargo handling equipment and engineering equipments.
This move may jeopardize India’s long overdue plan to sell debtor companies, causing losses and damage to India’s image as an investment location. India has already lost two petitions one with Vodafone Group and one with Cairn, although India has challenged both of these rulings. According to Bloomberg News, around May during the Cairn investigation, the authorities urged state-owned banks to protect their dollar-denominated deposits, fearing that they might also be confiscated.
The Indian authorities and Devas were involved in multiple lawsuits around the world, in which Devas demanded bonuses, while India sought to liquidate the company and investigate suspected fraud. The dispute began in 2011, when the state-owned Indian Antrix Corp. cancelled the transaction with Devas on the grounds of natural disasters. Devas said in their petition that the cancellation undermined the value of the multi-million dollar investment.
The arbitral tribunal awarded Devas more than US$111 million plus interest in 2020. Devas also received US$562.5 million in damages and interest in a separate lawsuit in the International Chamber of Commerce. Devas stated that Antrix did not pay any of the above fees. A spokesperson for the Indian Space Research Organization, which controls Antrix, did not immediately respond to a request for comment.
Country’s Attorney General K.K.Venugopal denied the possibility of reconciliation, saying that the Indian authorities “found serious fraud in the entire series of transactions that led to the dispute, including the arbitration agreement.” Devas’ lawyer denied these allegations. In Antrix’s petition, a company court in India ordered the liquidation of Devas last month. The appeal is pending in the Court of Appellate.