Antrix-Devas case: Delhi HC to pronounce verdict on arbitral award

In August, Justice Sanjeev Sachdeva of the Delhi high court held the arbitral award suffered patent illegalities and fraud

The Delhi high court will on Friday pronounce its judgment on satellite-based multimedia services provider Devas Multimedia Private Limited’s plea against a single-bench judge’s order in August that set aside the ₹15000 crore arbitral award granted to it over a sudden termination of its agreement with Indian Space Research Organisation’s commercial and marketing arm Antrix Corporation Limited.

Justice Sachdeva said being a product of fraud, Devas and its shareholders cannot be allowed to reap the benefits of their fraudulent action. (Shutterstock)

Devas signed a contract with Antrix in 2005 in connection with the building and launching of satellites and providing its internet services. Antrix cancelled the contract in 2011 citing extraordinary circumstances amid reports of procedural and regulatory irregularities. Devas moved a tribunal against the move.

In September 2015, the tribunal awarded ₹15000 crore as damages and interest to Devas.

The Supreme Court in January 2022 affirmed the findings of the National Company Law Appellate Tribunal that Devas was set up for a “fraudulent and unlawful purpose” of “unjust enrichment”.

In August, Justice Sanjeev Sachdeva of the Delhi high court held the arbitral award suffered patent illegalities and fraud. He said the award was also in conflict with the “public policy of India”.

Justice Sachdeva said being a product of fraud, Devas and its shareholders cannot be allowed to reap the benefits of their fraudulent action.

He cited the Supreme Court’s judgment saying the “seeds of the commercial relationship between Antrix and Devas were a product of fraud perpetrated by Devas and thus, every part of the plant that grew out of those seeds, such as the agreement, the disputes, arbitral awards, etc, are all infected with the poison of fraud”.

Devas challenged the single-judge bench’s order before a division bench. It argued Antrix was not entitled to terminate the agreement.

A bench of chief justice Satish Chandra Sharma and justice Subramonium Prasad reserved its order on the matter on December 16.