SG puts govt on guard against Devas firms

  • Nagendar Sharma, Hindustan Times, New Delhi
  • |
  • Updated: Nov 15, 2013 01:03 IST

A top law officer has cautioned the government against attempts by certain companies to drag it to international forums and seek compensation for the Antrix-Devas deal, which was scrapped in 2011.

Solicitor general Mohan Parasaran has advised the government to raise “preliminary objections” at the International Court of Arbitration, Paris, and other tribunals against the notice sent by German company Deutsche Telecom. The dispute relates to a 2005 deal between Devas Multimedia Private Limited and Antrix Corporation, the commercial arm of government-controlled Indian Space Research Organisation (Isro).

According to the deal, Antrix was to provide S-band spectrum to Devas, which was to provide wireless multimedia services. However, the deal was scrapped by the cabinet committee on security in 2011 after allegations of impropriety by the opposition parties.

The government denied the allegations, saying there was no question of any wrongdoing since the deal had not been finalised. Devas had refused to accept the government’s decision and initiated arbitration proceedings against Antrix. Deutsche Telecom sent a notice to the government in September, saying its Singapore-based subsidiary had a 20%stake in Devas and, therefore, it was entitled to seek compensation.

Parasaran, however, has questioned the company’s claim, saying: “It does not qualify as an investor under the Indo-German Bilateral Investment Agreement since the shareholding in Devas, approved by the Foreign Investment Promotion Bureau, is of a different company.”

The SG has termed the German company’s attempts “a blatant case of treaty shopping, which is completely contrary to the public policy of India”. He cautioned the government against certain companies trying to put pressure on the government by raising “multiple claims and seeking double recoveries”.  The SG has asked the government to question the jurisdiction of arbitration tribunals in taking up cases “contrary to bilateral treaties.”

 

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