US Federal Court refuses to stay Proceedings in Devas Multimedia v. Antrix Suit

Deepali Kalia

Published on August 11, 2021 at 13:57 IST

A US Federal Court has refused to stay proceedings in the Devas Multimedia v. Antrix Corporation case and criticized the commercial arm of the Indian Space Research Organization (ISRO) for ‘hindrance and delay’.

On October 27, 2020,  Judge Thomas S Zilly, U.S. District Judge, Western District of Washington, Seattle had asked Antrix Corporation to pay compensation of $1.2 billion to Devas Multimedia for cancelling a satellite deal it had struck with the Bengaluru-based startup in 2005.

Antrix had as per the 2005 agreement, assented to building, launching and operating two satellites and to make 70 MHz of S-band spectrum available to Devas which the startup had planned on utilizing to provide hybrid satellite and terrestrial communication services across India.

However, in February 2011 the agreement was terminated by Antrix.

The plea for stay on confirmation of the $ 1.3 billion arbitration award was rejected by the US Federal Court for the Western District of Washington, Seattle who criticized the delay by the liquidator of the company in appointing an advocate for Devas Multimedia.

The liquidator for Devas Multimedia contended that the US court cannot permit Devas shareholders to proceed as “It may run counter-productive to the efforts of the official liquidator.”

 “Shareholders taking proactive steps in the United States to enforce the ICC Award are committing contempt of court against the Supreme Court of India”, the liquidator contended.

The District Judge Thomas S Zilly made the following observations in his August 9 order with regard to the case:

“The liquidator for petitioner fired petitioner’s former counsel in early February 2021 and although the court directed the liquidator to hire new counsel in compliance with the local civil rules on March 23, 2021, the liquidator waited nearly four months to do so on July 14, 2021.” 

“As the court has repeatedly emphasised, this matter has been subjected to hindrance and delay, largely on the part of respondent Antrix Corp. Ltd. The parties’ dispute arises from conduct in February 2011, the award was issued in favour of petitioner in September 2015, and petitioner’s related confirmation action was filed in this court nearly three years ago in September 2018.”

“The court concludes that petitioner’s motion for a stay lacks merit under these circumstances and is intended to further delay these proceedings, as well as petitioners or intervenors’ right to recover on the award.”

Also Read: Antrix Corporation urges US Federal Court to block Devas Multimedia

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