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Failed 2005 satellite deal: US court refuses to stop Devas access to details of Antrix deal with US space firm

India News

A US court has rejected a plea by Antrix Corporation, Isro’s commercial arm, to stay a May 18 order of the court allowing investors in the now liquidated start-up Devas Multimedia to seek details of an agreement between Antrix and the US space launch services firm Spaceflight Inc.

The US District Court for the Western District of Washington rejected the Antrix Corp plea on July 13 for a stay on the May 18 order allowing three Mauritius investors in Devas Multimedia to access documents pertaining to commercial transactions between Spaceflight Inc and Antrix on the basis of court orders. Antrix had sought a stay on the order while it filed an appeal against the order—to recover compensation to the tune of $ 111 million awarded to Devas Multimedia over the cancellation of the 2005 satellite deal.

Spaceflight Inc uses Isro rockets, among others, to provide launch services for global clients. The firm signed up in 2019 to be the first user of Isro’s Small Satellite Launch Vehicle—which is still under development—and facilitated the launch of Brazil’s first satellite in February 2021 on the Indian space agency’s workhorse PSLV rocket.

In its order on May 18, the US court had rejected a Devas plea to identify the Indian Space Research Organisation and its new commercial arm NewSpace India Limited as alter egos of Antrix in the dispute over a failed 2005 Devas-Antrix satellite deal.

Investors in Devas Multimedia are attempting to seize assets linked to Antrix Corp in the US to enforce a $1.2 billion compensation award made in favour of Devas Multimedia by the International Chamber of Commerce (ICC) on September 14, 2015, for the cancellation of the 2005 satellite deal in 2011.

The ICC order was confirmed by the US court on October 27, 2020. The Mauritius investors themselves have been awarded a compensation of $111 million by an arbitration court while another foreign investor Deutsche Telekom has been awarded $101 million.

Apart from Spaceflight Inc, the Mauritius investors are also attempting to seize funds at the US satellite firm Intelsat Service and Equipment LLC which has outstanding dues payable to Antrix through proceedings in the US federal court for the Eastern District of Virginia.

Antrix Corp told the US District Court for the Western District of Washington earlier this year that Intelsat, which is under bankruptcy proceedings in the Eastern District of Virginia, owed the Isro commercial arm $146,457 and stated that this was the only asset of the company in the US. Based on the submissions, the US federal court concluded that its order of August 16, 2021, allowing the discovery of Antrix assets could be registered in the Virginia court.

Under the failed 2005 Antrix-Devas deal, Isro was supposed to lease two communication satellites for 12 years at a cost of Rs 167 crore to Devas Multimedia. The start-up was to provide multimedia services to mobile platforms in India using the space band or S-band transponders on Isro’s GSAT 6 and 6A satellites built at a cost of Rs 766 crore by the Indian space agency.

The deal was annulled by the UPA government in February 2011 amid the 2G crisis by citing the requirement of the S-band spectrum for security purposes of the country.

After the NDA government came to power in 2014, the Enforcement Directorate and the Central Bureau of Investigation were asked to investigate the deal. These agencies are pursuing cases of money laundering and corruption in India against Devas Multimedia and its officials.

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