US court upholds Devas award enforcement against Antrix; claim tops $2 bn

The Ninth Circuit upheld confirmation of the $562.5 million arbitral award but directed a US district court to examine the impact of subsequent annulment proceedings in India

Stressing that it has jurisdiction in the matter, an appeals court in the United States (US) has cleared the way for enforcing a long-running arbitral award against Antrix Corporation, the commercial arm of the Indian Space Research Organisation (Isro).

 

It has held that US courts had the judicial powers to recognise the award despite the company being wholly owned by the Indian government.

 

A three-judge Bench of the US Court of Appeals for the Ninth Circuit, comprising Circuit Judges Eric D Miller and Lucy H Koh and District Judge Donald W Molloy, affirmed the confirmation of the $562.5 million award in favour of Devas Multimedia. 

With accumulated interest, the claim has crossed $2 billion, according to Devas’ counsel Baker Botts.

 

The dispute arose from a 2005 agreement under which Antrix was to build and launch satellites and provide Devas access to S-band spectrum. 

Antrix terminated the agreement in 2011 after the government decided that the spectrum and satellite capacity were required for its own purposes. 

A tribunal of the International Chamber of Commerce (ICC) awarded Devas $562.5 million plus interest in 2015, finding that Antrix had wrongfully terminated the contract.

 

Devas then approached a US federal court in Washington to recognise the award under the New York Convention. The district court confirmed it and entered a judgment of about $1.29 billion against Antrix. 

The Ninth Circuit initially overturned that decision, holding that US courts lacked personal jurisdiction over Antrix.

 

However, the US Supreme Court reversed that ruling in June last year, holding that the Foreign Sovereign Immunities Act (FSIA) did not impose an additional “minimum contacts” requirement where an immunity exception applied and service had been properly effected.

 

On remand, the Ninth Circuit rejected Antrix’s argument that the underlying transaction needed a US connection for the FSIA’s arbitration exception to apply.

 

It also held that exercising personal jurisdiction over Antrix was consistent with the Fifth Amendment. 

However, the court directed the district court to examine the consequences of subsequent proceedings in India, in which the award was set aside.

 

This could now become Antrix’s principal line of defence. The Delhi High Court annulled the ICC award in 2022 after findings concerning fraud, and the Supreme Court dismissed Devas’ challenge in 2023.

 

“Antrix’s strongest argument is likely to be that an award annulled in the primary jurisdiction should not be enforced in the US as if the Indian proceedings are irrelevant,” said Soumya Singh, partner at law firm Thistle and Law.

 

Antrix can seek rehearing before the Ninth Circuit and thereafter approach the US Supreme Court. But Singh said the more practical battleground could be the remand proceedings before the US district court, where the effect of the Indian annulment will be considered. 

For Isro, the award is not a direct liability because it is against Antrix.

 

However, Singh said the ruling has wider strategic and reputational implications, because foreign courts were treating Antrix as a commercial contracting party capable of facing enforcement proceedings abroad.

 

The judgment also signals that state ownership alone may not shield government-linked commercial entities from overseas enforcement.

 

“Cross-border contracts cannot be viewed only through the lens of Indian proceedings once foreign enforcement courts are involved,” Singh said. 

The Ninth Circuit separately reversed the registration of the judgment sought by three Mauritian shareholders of Devas for lack of standing, while affirming registration in favour of Devas Multimedia America Inc.

 

The dispute now shifts to the effect of India’s annulment order and the extent to which Devas can proceed against Antrix’s assets in the US. 

The case so far

• Antrix, Devas sign deal for S-band spectrum in 2005
• Deal terminated by Antrix in 2011, Devas sues
• Tribunal awards Devas $562.5 mn-plus interest in 2015
• Antrix appeals on jurisdiction, US Supreme Court rejects appeal
• Ninth Circuit upholds Devas award, claim plus interest now over $2 billion