What was the deal all about? 

In 2005, ISRO arm Antrix agreed to launch two satellites for private company Devas Multimedia. The agreement included unbridled 20-year use of 70 MHz of S-band spectrum. Devas Multimedia agreed to pay $40 million as pre-launch capacity reservation and $250 million for satellite capacity lease. Devas wanted to offer satellite broadband services across India on various platforms, including mobile. It claimed to have developed its own portable device, which acts like a WiFi router. 

Why did the deal run into trouble? 

The deal promised Devas Multimedia access to 70 Mhz of broadband spectrum in the 2,500 Mhz band. In 2010, the Union Government got nearly ₹67,719 crore from the auction of just 15 Mhz of similar airwaves for 3G mobile services. In 2011, the Comptroller and Auditor General of India (CAG) asked the Department of Space to explain the preferential allocation of S-band spectrum without competitive bidding; diversion of public resources from ISRO’s budget to two customer-specific satellites for Devas Multimedia; and misinforming regulators about the project’s financial aspects and commercial implications. Subsequent investigations showed that officials had suppressed material facts to get the deal approved. The deal was terminated in 2011.  

What happened next? 

Devas Multimedia filed legal challenges against the cancellation of the agreement in Indian and international arbitration tribunals. In 2015, Devas won an arbitration award of $562 million against Antrix at the International Chamber of Commerce. The Permanent Court of Arbitration tribunal upheld the award. Devas has also been able to get court rulings, in Quebec and Paris, allowing it to seize assets owned by the Indian government or its affiliated entities. India has appealed in Indian as well as US courts against the arbitration and seizure orders.  

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What was the Indian government’s response? 

While Devas was winning in international courts, India filed an application with the National Company Law Tribunal (NCLT) to wind up Devas Multimedia, citing fraud. In May 2021, the Bengaluru bench of NCLT ordered the liquidation of Devas Multimedia Pvt Ltd, declaring that the company was incorporated in a fraudulent manner for unlawful purposes. On the contention of Devas that the fraud was claimed neither in the termination letter of 2011 nor before the International Criminal Court  during arbitration, the NCLT observed that the fraud emerged post-2016 when the Central Bureau of Investigation probed the deal. The NCLT order was upheld by the National Company Law Apellette Tribunal (NCLAT) in September. Devas appealed to the Supreme Court, which then upheld the NCLAT order.

What does the Supreme Court order mean for Devas? 

Armed with the SC order, India can appeal in international courts against the arbitration award. India can argue that since the 2005 deal has proven to be a fraud the award needs to be revoked in the light of fresh evidence. Devas will continue to push for seizing more assets in other countries in lieu of the arbitration awards.  

What next?  

There are several cases filed by Devas in different international courts.  India will have to fight these cases till there is a final decision on the arbitration awards and seizure of assets in foreign countries.