Delhi HC upholds dismissal of arbitral award to Devas

The Delhi High Court on Friday upheld a single judge order setting aside a $562.2 million arbitral award with interest and cost to satellite-based multimedia services provider Devas Multimedia.

Devas has claimed the Indian Space Research Organisation's Antrix Corporation unlawfully terminated a deal in 2011.

Upholding its single judge's order that set aside the arbitral award of September 2015, a division bench comprising Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad said that Supreme Court findings that Devas was incorporated with fraudulent intentions by conniving and colluding with the then Antrix officials have attained finality and are binding upon the parties.


It is also well established that Devas suppressed and misrepresented information to pursue its fraudulent activities in India, the bench said.

"The principle of 'fraud vitiates all solemn acts' is applicable not only to the primary proceedings but also to all collateral proceedings that arise out of the same facts and circumstances. The act of fraud is an anathema to all equitable principles and every transaction tainted with fraud must be viewed with disdain by courts," the judgment stated.

According to the HC, the Supreme Court had held that the commercial relationship between Devas and Antrix is a product of fraud, and as a consequence, the Devas Agreement, the International Chamber of Commerce (ICC) Award, and all other disputes arising out of the transaction would be tainted by fraud, according to the HC.

"Permitting Devas and its shareholders to reap the benefits of the ICC Award would amount to this court perpetuating the fraud. Such a view would be against all principles of justice, equity, and good conscience. The learned Single Judge has not made an error in setting aside the ICC Award on the grounds of fraud, and it being in conflict with the public policy of India," the division bench said while dismissing Devas' appeal.

Antrix had annulled its 2005 contract to lease space segment capacity on two satellites in February 2011 after allegations of the deal being a quid pro quo "sweetheart deal" were raised.

Devas then invoked the India-Mauritius Bilateral Investment Protection Agreement and moved the Permanent Court of Arbitration, which directed India to pay $111 million with interest and costs. Devas had also won arbitration proceedings before ICC in 2015 that resulted in an award against Antrix.

Antrix had approached the HC single-judge bench asking it to set aside the award while it also sought the winding up of Devas.