US court docket refuses to remain proceedings in NCLT to liquidate Devas Multimedia

CITING THE must protect worldwide comity, a US federal court docket has refused to impose a keep on proceedings initiated in India by Antrix Corporation – the ISRO’s business arm – to liquidate Devas Multimedia Pvt Ltd, which has been awarded a $1.2 billion compensation by a world arbitration discussion board over a failed 2005 satellite tv for pc deal.
The court docket of Western District of Washington in Seattle refused to remain the proceedings in a National Company Law Tribunal (NCLT) bench in Bengaluru in a March 29 order, regardless of issuing a short lived restraining order within the matter on February 24.
Three international traders in Devas Multimedia, and US subsidiary Devas Multimedia America Inc, approached the US court docket expressing fears of Devas Multimedia coming into an settlement with Antrix Corporation on compensation fee within the wake of the latter shifting to liquidate the Bengaluru-headquartered Devas Multimedia within the NCLT.
“Although substantial evidence suggests that collusive conduct may be afoot, thereby frustrating this court’s interests in prevent[ing] vexatious or oppressive litigation in a foreign forum and in protect[ing] [its] jurisdiction, the court concludes that the interests in preserving international comity should carry great weight in this case,” US federal decide Thomas Zilly stated in his order, refusing intervention within the proceedings in India.
Earlier in a February 24 non permanent order, the court docket had acknowledged that Devas Multimedia and “its shareholders, directors, officers, agents, employees, and legal representatives, are prohibited from taking any action with respect to the award” of $ 1.2 billion confirmed by the US court docket in November 2020 “without first obtaining the approval of the court”.

DefinedAntrix-Devas deal that was scrappedDevas Multimedia and Antrix Corporation signed an settlement on January 28, 2005 for ISRO to lease two communication satellites for 12 years at a value of Rs 167 crore to Devas Multimedia. The deal was annulled by the UPA authorities in February 2011 within the backdrop of the 2G rip-off and allegations of a sweetheart deal in allocation of the S-band spectrum to Devas Multimedia.

The court docket has additionally allowed three international traders in Devas Multimedia – CC/Devas (Mauritius) Ltd., Devas Employees Mauritius Private Limited, Telecom Devas Mauritius Limited and Devas Multimedia America Inc – to intervene on behalf of Devas Multimedia in an enchantment filed by Antrix Corporation towards the affirmation of the $ 1.2 billion compensation award.
The international traders and the US subsidiary of Devas Multimedia moved US courts after reportedly studying that an effort was being made to abort the fee of the compensation by getting Devas Multimedia declared as a fraudulent entity. The international traders claimed that India’s Law Ministry has issued an ordinance amending the Indian Arbitration and Conciliation Act of 1996 to permit courts to remain an arbitration award whether it is confirmed that an “arbitration agreement or contract which is the basis of the award… was induced or effected by fraud or corruption”.

They claimed that the NCLT appointed a authorities official as “provisional liquidator” of Devas Multimedia following a plea by Antrix, which moved a liquidation plea after it was ordered to compensate for the failed 2005 satellite tv for pc deal.
The US federal court docket acknowledged that it issued a short lived restraining order on authorized proceedings in India in February to stop Devas Multimedia from being “unfairly liquidated” and that new briefings counsel that the intervenors of Devas Multimedia are actively taking part in authorized proceedings in India.
“The court is satisfied that intervenors’ participation in the proceedings in India may work to mitigate any threat of irreparable harm to them or petitioner. Further, in the event the award is set aside by the Supreme Court of India, respondent will still be required to file a motion in this court to vacate the confirmation order and judgment, and intervenors will have an opportunity to respond to any such motion,” decide Zilly acknowledged. “Because the court concludes that intervenors have not sustained their burden to show a likelihood of irreparable harm in the absence of the injunctive relief they seek, and that international comity concerns counsel against a preliminary injunction, the court denies the motion for a preliminary injunction.”

The US federal court docket additionally denied a movement moved by the NCLT appointed provisional liquidator M Jayakumar to intervene searching for a keep on proceedings within the US court docket.
Devas Multimedia and Antrix Corporation signed an settlement on January 28, 2005 for ISRO to lease two communication satellites for 12 years at a value of Rs 167 crore to Devas Multimedia. The latter, a start-up agency, was to offer multimedia companies to cell platforms in India utilizing the house band or S-band spectrum transponders on ISRO’s GSAT 6 and 6A satellites constructed at a value of Rs 766 crore by ISRO. The deal was annulled by the UPA authorities in February 2011 within the backdrop of the 2G rip-off and allegations of a sweetheart deal in allocation of the S-band spectrum to Devas Multimedia.