As Cairn grabs Indian assets overseas, government troubles may only just begin
Devas Multimedia, a company which is seeking more than $ 1.2 billion it won in a similar prize against the government, is now likely to push for similar measures imposed by the court following the French order. today in favor of Cairn.
Devas’ eyes are on Air India, which he describes as the “alter ego” of the Indian state. The company has already filed a complaint in the United States. He asked Air India to pay the amount or give up its US assets like airplanes, cargo handling machinery and artwork.
If this appeal were to lead to a favorable decision, it would prove to be a double whammy for the government. Along with the loss of Air India’s U.S. assets, it would also mean that the government’s long-delayed plans to sell the flagship carrier would face an even bigger hurdle.
More importantly, other similar verdicts could seriously damage India’s position as an investment destination.
India suffered two big setbacks in international arbitration tribunals last year. One was the fight with Cairn, and the other was a $ 3 billion tax dispute with the Vodafone Group. India appealed against both decisions.
Devas and the Indian government are locked in a number of showdowns. While Devas wants the reward amount paid immediately, India wants to liquidate the company and investigate a (alleged) scam.
The dispute began in 2011, with Antrix Corp – a state-owned company under the ISRO umbrella – breaking off a deal with Devas citing force majeure. According to Devas’ petition, this Antrix action resulted in a significant erosion of the value of its investments.
In 2020, an arbitration tribunal awarded Devas more than $ 111 million plus interest. The company also received $ 562.5 million in damages from the International Chamber of Commerce. Antrix hasn’t paid anything to date, says Devas.
In November 2020, the Supreme Court of India stopped the implementation of the $ 1.2 billion award on the grounds that “the government discovered serious fraud in the whole series of transactions leading to the disputes, including including the arbitration agreement “. Devas, however, denies it.
In May, NCLT followed up on a request from Antrix to order the liquidation of Devas. The company’s appeal is currently pending at NCLAT.