For the first time, a foreign court has recognised the Indian Supreme Court’s decision to liquidate Devas Multimedia for fraudulent incorporation. On Tuesday, the Hague Court in Netherlands refused to enforce the ICC award against Antrix, which is in excess of $1 billion dollars as of now. The petition to enforce the ICC award was filed by the Devas Multimedia America Inc, the American subsidiary of the now dissolved Devas Multimedia.
Multiple stakeholders of Devas Multimedia, including shareholders and investors in the company, have been trying to claim the ICC award as well $111.3 million dollar arbitral award that the District Court of Hague granted shareholders against the Indian government in various jurisdictions internationally. Certain Antrix assets have already been seized in the US, and certain assets of the Indian government have also been seized in France and Canada.
These arbitration awards were granted against the Indian government and Antrix, after Devas shareholders dragged both of the parties to international courts for wrongful termination of a commercial contract between Devas and Antrix in 2011.
Antrix had abruptly cancelled its 2005 deal with Devas in 2011 amid the 2G telecom controversy and reports emerging that the deal was part of a “quid pro quo” between Antrix officials and the company, which was established by former ISRO officials and a company called World Space. The annulment prompted Devas to institute arbitration proceedings, which resulted in adverse findings against India.
In a bid to fight the arbitral awards, India’s legal team filed cases with the Indian court alleging that Devas Multimedia was fraudulently incorporated for unlawful purposes. The Supreme Court decided on this matter in the favour of Antrix, and upheld the NCLT’s decision to dissolve the company and appoint a court appointed liquidator. On the basis of the Supreme Court decision, the Delhi High Court set aside the ICC award.
This legal history in the Indian courts has played in favour of Antrix in the matter against DMAI in Hague. The Hague court observed the following, “It follows from all of the foregoing that the Liquidation Judgment can be recognised in the Netherlands. This means that the legal consequences of the Liquidation Judgment must be recognised in the Netherlands. This means that the Dutch court must assume that Devas has gone into liquidation and that a liquidator is in office. It is not in dispute between the parties that under Indian law in case of liquidation, the appointed Liquidator is exclusively authorised to act on behalf of the liquidated company, in this case Devas.
On the basis of this context, the Hague Court has decided that, “Declares DMAI inadmassible in its request for leave to enforce ICC judgement.”
Published on July 18, 2023
