Devas claims Rs 9,000 cr in damages from ISRO

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  1. AVERAGE INDIAN

    AVERAGE INDIAN EXORCIST Senior Member

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    Devas Multimedia, the Bangalore-based company whose business contract to launch satellite-based data services for mobile devices was cancelled by the government in 2011, has demanded at least $ 1.6 billion (about Rs 9,000 crore) from the Department of Space in damages.

    Devas has already initiated arbitration proceedings against Antrix Corporation, the marketing arm of India's space agency ISRO, for settling the dispute arising out of the termination of contract in February 2011. Antrix has so far not participated in the arbitration. Last month, its plea to hold the arbitration under a rule different from the one invoked by Devas was thrown out by the Supreme Court.

    Devas has told Antrix it will no longer insist on the reinstatement of the agreement and will accordingly modify its petition at the arbitration. Its only prayer before the arbitration would be to claim damages for the losses it suffered due to the cancellation of the agreement. "Antrix continues to be in repudiatory breach of the agreement even today and has clearly evinced its intention not to perform the agreement. Devas has elected to, and does hereby, accept Antrix's repudiatory breach of agreement, bringing the agreement to an end as a result of Antrix's wrongful actions. Devas will be amending its claim in the arbitration to reflect the withdrawal of its claim for specific performance (of the agreement) whilst maintaining its claim for damages as a result of Antrix's breaches of contract," Devas has said in a recent communication to Antrix.

    Devas has also accused Antrix of trying to obstruct the "expeditious determination" of the arbitration proceedings. No one from Antrix was available for comment.

    Devas had entered into a contract with Antrix in January 2005 for lease of 90 per cent of transponder space on two satellites that were to be launched by ISRO. Devas intended to use S-band radio frequency signals to launch multimedia services for mobile devices. Antrix was to earn $ 300 million (Rs 1,350 crore at that time) over a period of 12 years from Devas.

    Following a change of guard at ISRO at the end of 2009, and a series of murky developments, a review of the agreement was ordered. In July 2010, the Space Commission, the highest policy-making body on Space matters, decided to annul the contract on the ground that the S-band, in which frequencies were being allotted to Devas, was extremely scarce and barely enough to meet India's strategic requirements.

    The arbitration initiated by Devas is not the only trouble Antrix and ISRO are facing. Last month, the major investors in Devas initiated separate arbitration proceedings against Antrix at the Permanent Court of Arbitration at The Hague. Three companies, which had invested in Devas through their Mauritius-based operations, are claiming damages citing a breach of a bilateral investment agreement between India and Mauritius.

    Devas claims Rs 9,000 cr in damages from ISRO - Indian Express
     
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