Devas Multimedia has seized $87,457.47 cash that ISRO's commercial arm Antrix Corporation held in the US as it looked to enforce a $1.2 billion compensation it had won over a cancelled satellite deal, its lawyer said on Wednesday.
Devas Multimedia America Inc had sought seizure of $145,000 but the actual recovery was $87,457.47 (a little less than Rs 70 lakh).
This came after it secured a favourable order from the Eastern District Court of Virginia, Matthew D McGrill said.
Originally, the company stated that it had seized $145,000 cash but later clarified that the actual seizure was lower than that amount.
"The original claim amount was around $145,000 but was reduced as part of the bankruptcy proceedings (normal bankruptcy proceedings)," it said.
The satellite company has been embroiled in a fight with the Indian government since a contract it had to develop wireless broadband in the country was cancelled in 2011.
It was awarded $1.2 billion in international arbitration rulings, but the government refused to pay, alleging that the original 2005 award of contract was mired in fraud.
Devas shareholders, who include US investment groups Columbia Capital and Telecom Ventures as well as Deutsche Telekom, has since been targeting Indian state assets abroad to recover the money they think India owes the company.
"The seizure of Antrix assets sends a clear message: Despite the Modi government's... (actions) and transnational repression against Mr. Viswanathan, the shareholders of Devas will not waiver in their pursuit to collect what they are rightfully owed from the Indian government," said McGill, Partner at Gibson, Dunn & Crutcher and Lead Counsel to Devas Shareholders.
The seizure of the assets comes at a time when the Indian government is seeking arrest and prosecution of Devas' co-founder Ramachandran Viswanathan.
Devas shareholders had previously got a French court order for freezing Indian properties in Paris and got partial rights over funds maintained by India funds in Canada.
The September 14, 2015 ICC order was confirmed by the US court on October 27, 2020. The Mauritius investors themselves have been awarded a compensation of $111 million by an arbitration court, while Deutsche Telekom has been awarded $101 million.
The finance ministry did not reply to an email sent seeking comments.
In January of this year, shareholders of Devas petitioned US District Judge Thomas S Zilly of the Western District of Washington, who granted Devas shareholders the right to pursue assets owned by Antrix in any US jurisdiction.
That ruling was used to target Antrix assets in the Eastern District of Virginia.
Judge Zilly's ruling gave Devas shareholders the right to enforce the ICC judgment against Intelsat Serving Equipment LLC, which had owed Antrix over $145,000.
The Devas investors targeted funds of the US satellite firm Intelsat Service and Equipment LLC which has outstanding dues payable to Antrix through proceedings in the US federal court for the Eastern District of Virginia.
Antrix Corp told the court earlier this year that Intelsat, which is under bankruptcy proceedings in the Eastern District of Virginia, owed $146,457 and stated that this was the only asset of the company in the US.
This is the asset that has been seized now.
In US courts, Devas shareholders also contended that Indian Space Research Organisation (ISRO) and its new commercial arm NewSpace India Ltd are alter egos of Antrix and so they should be made to pay for the arbitration award.
Antrix had an agreement with the US space launch service firm Spaceflight Inc. Spaceflight uses ISRO rockets, among others, to provide launch services for global clients.
Under the failed 2005 deal, Antrix Corporation, the government-owned commercial arm of the Indian Space Research Organisation (ISRO), signed an agreement with Bengaluru-based Devas Multimedia for a 12-year lease of 90 per cent transponder space on two satellites, G-SAT6 and G-SAT6A that were yet to be launched.
Of the 150 MHz of space that ISRO owned in the S-band spectrum, Devas was allowed the use of 70 MHz to launch satellite-based applications on mobile devices.
Devas, which had a few former ISRO scientists in its top management, was supposed to pay $300 million to Antrix over the 12-year period.
The start-up was to provide multimedia services to mobile platforms in India using the space band or S-band transponders on ISRO's GSAT 6 and 6A satellites built at a cost of Rs 766 crore by the Indian space agency.
But the deal was annulled by the UPA government in February 2011, when the 2G spectrum allocation scam hit headlines, citing the requirement of the S-band spectrum for security purposes of the country.
There were allegations of the deal being a quid pro quo "sweetheart deal".
In 2014, the CBI and Enforcement Directorate were asked to probe the deal.
Devas Multimedia initiated arbitration against the annulment of the 2005 deal at the International Chambers of Commerce (ICC).
Two separate arbitrations were also initiated under the bilateral investment treaty (BIT) by Mauritius investors in Devas Multimedia (under the India-Mauritius BIT) and by Deutsche Telekom, a German company, under the India Germany BIT. India lost all three disputes.
The commercial terminal award was for a total of $1 billion while $93.3 million plus cost and interest was awarded against India under the arbitration brought under the India Germany BIT.
About $111.2 million plus cost and interest was awarded in the arbitration under India Mauritius BIT.
Devas shareholders had previously in effect seized a property in Paris' upmarket 16th arrondissement after obtaining an asset freeze order from a Paris court allowing it to register a mortgage on the property.
The building has previously served as the residence of the deputy chief of mission at the Indian embassy.