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Tags Current Affairs

Devas arbitration

Date: 11 January 2022 Tags: India & World

Issue

Recently, Devas shareholders announced that it won an award by a Canadian court to seize properties of Air India.

 

Background

The case pertains to arbitration award that Devas Shareholders had won against the Indian government.

 

Details

  • The amount collected by International Air Transport Association (IATA) on behalf of Air India and AAI was to be seized by Devas.

  • The arbitration award was granted by a tribunal to Devas Shareholders after India cancelled the Devas-Antrix deal in 2011.

  • Devas is eyeing  U.S. $17.3 million of ticketing fees collected on behalf of Air India and U.S. $12.76 million of air navigation and aerodrome charges international airlines owe to AAI. 

  • Air India and AAI have moved the Quebec Superior Court to quash the seizure order. The court has reserved it decision.

 

Antrix-Devas deal

  • Antrix, the commercial arm of ISRO has signed a deal with Telecommunication Company Devas Multimedia in 2005.

  • Under the deal, Antrix would build and launch two ISRO satellites and lease the corresponding S-band satellite spectrum to Devas, for providing internet services.

 

Controversy

  • A leaked CAG report showed that there was financial mismanagement and violation of standard procedure.

  • The government cancelled the Antrix-Devas deal in February 2011. Subsequent probes did not find any evidence of quid pro quo or bribery. 

 

Reasons for seizing AAI properties

  • Even after winning arbitration award from three tribunals, the Indian government has failed to pay any compensation amount.

  • The negotiation held could not come to any conclusion and Devas Shareholders were forced to move against India’s assets globally.

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