New Delhi: There is a big blow for India, as International Tribunal in The Hague has ordered India to pay Devas Multimedia in a case relating to unilateral cancellation of satellite leasing agreement. India may have to pay up to a billion dollars in damages. The case was filed by Devas Multimedia that signed a contract in 2005 with Antrix, commercial arm of the Indian Space Research Organisation (ISRO).
Devas Multimedia had dragged India’s space research firm into international arbitration after its deal for 70 megahertz (MHz) spectrum in S frequency band and leased space on two satellites was terminated on charges of irregularities. The $300-million deal was signed in 2005 between the commercial arm of ISRO — Antrix Corporation — and Devas Multimedia for 70 megahertz (MHz) spectrum in S band, which is said to be rare and used only for national and strategic purposes.
The airwave allocation to Devas was to be made from the 150 MHz of spectrum with ISRO. The deal also involved a 12-year lease of 90% transponder space on two satellites — G-SAT6 and G-SAT6A — that were to be launched.
The pact would have given Devas first-mover advantage in the satellite-telephony market. Satellite-based mobile services do not require cell sites or towers. This gives it better coverage then terrestrial services. Satellite telephones are expensive and only used for strategic and military purpose. Devas wanted to bring down the cost by making it widely available.
In 2010, ISRO appointed a one-man internal committee to look into the deal and later it was reported that its audit had thrown up irregularities in terms of financial mismanagement, conflict of interest, non-compliance of rules and favouritism. The agreement was terminated by the government on February 17, 2011, after the issue was deliberated at a meeting of the Space Commission.
Following the termination, Devas decided to take legal recourse to seek damages for cancellation of the deal, which it said had not violated any norm. In 2015, Antrix was fined to the tune of Rs 4,400 crore by International Arbitration Court for unilaterally terminating its contract with Devas.