Deutsche Telekom seizes $12.7-mn AAI dues on Swiss court order

Three Devas Multimedia investors had secured seizure of AAI and Air India's dues last year. In Jan, Superior Court of Quebec in Canada set aside seizure of AAI dues, capped Air India dues at 50%

Over $12.7 million belonging to the Airport Authority of India (AAI) have been seized again – this time on orders of a court in Switzerland.

A Swiss court has passed an order to seize the amount held by the International Air Transport Association on behalf of AAI on an application by Deutsche Telekom, a minority shareholder in Devas Multimedia.

Three Mauritius-based shareholders of Devas Multimedia had secured the seizure of AAI and Air India’s dues from a Canadian court in November and December. Subsequently in January, the Superior Court of Quebec in Canada set aside the seizure of AAI dues and limited the seizure of Air India dues to 50 per cent.

But before the funds could be released and remitted by IATA to AAI, an order was passed in a Swiss court to attach the dues. The dues consist of route navigation charges collected by IATA from foreign airlines on behalf of AAI.

 “For quashing of the seizure order in Switzerland, AAI is following the legal course as provided under Swiss laws, including the diplomatic channel,” AAI said in its response. “The matter is still sub judice,” it added.

“Deutsche Telekom (DT) is lawfully pursuing enforcement of a recognized international arbitration award against India based on the Germany - India investment protection agreement. As these are ongoing proceedings, we do not wish to comment further,” a company spokesperson said.

The development comes even as the Supreme Court of India last month upheld the winding up of Devas Multimedia. Union finance minister Nirmala Sitharaman later described the Antrix-Devas deal as a fraud against the country.

“We will now take this SC order, and make sure that justice is served on international fora,” Sitharaman had said a day after the apex court judgment.

In January 2005 Devas Multimedia entered into a 12-year agreement with Antrix  Corporation. The agreement provided that Antrix would lease 70 MHz of electromagnetic spectrum to Devas for providing broadband wireless services within India. Between 2008 and 2009 DT invested $97.2 million in Devas Multimedia for a 19.62 per cent stake in the company. In 2011 the government scrapped the contract on security grounds.

Subsequently, Devas and its Mauritian and German shareholders filed arbitration claims against the Indian government.

In May 2020 the permanent court of arbitration in Geneva ruled in Deutsche Telekom’s favour, awardingit  a compensation of $135 million for cancellation of the Devas contract. Last April it filed a petition in a district court in the US seeking confirmation of compensation awarded to it.