OPEN APP
Home / Companies / News /  Devas investors win Canada suit to seize AAI and Air India funds

Devas investors win Canada suit to seize AAI and Air India funds

AAI and Air India are being targeted because they are Indian public sector entities with overseas assets (Photo: Mint)Premium
AAI and Air India are being targeted because they are Indian public sector entities with overseas assets (Photo: Mint)

Three Mauritius-based entities, which have partnered with state-owned Antrix Corp to offer wireless broadband services in India, won orders from a Canadian court to seize amounts collected by the IATA on behalf of the AAI and Air India, court documents showed

Listen to this article

NEW DELHI : Three Mauritius-based entities, which have partnered with state-owned Antrix Corp. Ltd to offer wireless broadband services in India, won orders from a Canadian court to seize amounts collected by the International Air Transport Association (IATA) on behalf of the Airport Authority of India (AAI) and Air India, court documents showed.

AAI and Air India are being targeted because they are Indian public sector entities with overseas assets and serve as a proxy for the government of India. The three investors—Devas (Mauritius) Ltd, Telcom Devas Mauritius Ltd and Devas Employees Mauritius Pvt. Ltd—have won international arbitration awards in its dispute with Antrix Corp. Ltd and the Indian government.

According to a spokesperson for the three entities, more than $30 million has been seized to date under the IATA action after winning two favourable orders in Canada in November and December.

IATA, an international trade association with its head office in Montreal, facilitates the payment, by airlines ad countries, of air navigation charges and aerodrome charges to aviation service providers around the world, including air navigation authorities like AAI.

The Canadian court in Montreal passed separate orders on 24 November and 21 December on pleas by shareholders of Devas Multimedia Pvt. Ltd to enforce arbitration awards against the Indian government.

After the order on 21 December, Air India removed its inventory from global distribution systems (GDS), used by travel agents to issue tickets.

Meanwhile, Tata group, which will take over Air India later this month, has been granted indemnity from past legal claims in its shareholder agreement with the government.

Devas entities are trying to enforce international arbitration awards they won for the cancellation of a satellite capacity leasing deal between Bangalore-based Devas Multimedia and Antrix in 2011. Last year, the National Company Law Tribunal ordered the liquidation of Devas Multimedia on a petition filed by Antrix, and an appeal is currently pending in the Supreme Court even as its overseas shareholders pursue the matter in global forums.

There was no response to queries emailed to spokespersons for Air India, Airports Authority of India, finance ministry and the Prime Minister’s Office at the time of publishing.

The international arbitration was triggered after the cancellation of the Devas-Antrix satellite capacity leasing deal in 2011 by Antrix, citing “force majeure." Devas signed the deal to offer mobile multimedia and broadband wireless services in India.

In 2015, the three Mauritius-based Devas shareholders had won $562.5 million in damages plus 18% annual interest in arbitration. In October 2020, they also secured an arbitration award of $111 million-plus interest, as compensation for the expropriation of 40% of interests in the satellite/terrestrial communications business owned by Devas, according to the information given by the three entities. Devas’ legal action aims to enforce only the 2020 arbitration award of $111 million-plus interest.

“We will pursue the Indian government in courts worldwide to ensure the debts owed to Devas are satisfied. Our action in Canada has resulted in millions of dollars garnished by Devas’ shareholders and represents the first fruits of a globally focused effort to be paid," Matthew D. McGill, partner at law firm Gibson, Dunn & Crutcher LLP, and lead counsel for several Devas’ shareholders, said in a statement.

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Recommended For You

×
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout