ISRO’s commercial arm Antrix has told a court in the United States that Devas shareholders have no locus standi to claim the $1.3-billion arbitration award, given that Devas Multimedia Private Ltd is now under the control of a liquidator appointed by the National Company Law Tribunal (NCLT).
Antrix also said the Devas shareholders are trying to put themselves as rightful claimants when minority shareholders do not own or have any rights in Devas’ assets under the governing Indian law. The Indian space agency has filed this petition with the US, Western District Court of Washington, where shareholders of Devas have filed to attach Antrix’s assets to enforce the arbitration award.
‘No rights’
“The minority shareholders do not own or have any rights in Devas’ assets, including the judgment, under governing Indian law. Indian law is thus consistent with the well-established principle of the US law that shareholders do not have rights in the assets of the corporation,” Antrix’s petition to Judge Zilly said.
“Devas is an Indian corporation; therefore whatever rights its shareholders have in its property are governed by Indian law,” the petition added.
The legal counsel representing the liquidators of Devas Multimedia in May had also petitioned Judge Zilly opposing Devas shareholders’ attempts to collect the $1.3 million award. They argued, “If the intervenors’ (Devas shareholders) motion were granted, they would have a path to seize the reins of this dispute from Devas’ court-appointed liquidator, which wields the sole authority to represent Devas under Indian law.”
Moreover, the liquidators argued that Devas Multimedia America Inc (DMAI), one of Devas shareholders, “ ... cannot register or execute the judgment without Devas’ consent or in an unlawful manner. DMAI also lacks good cause to register the judgment because it lacks any authority to do so. DMAI relies upon the Collection Services Agreement to support its presence in this case. Yet, that agreement bars DMAI from registration and execution of the award in these circumstances.”
Shareholders’ response
In response, Devas shareholders said the position taken by Antrix is a plot to avoid the obligation to pay out the award. “The liquidator is employed by Antrix’s parent government. The proceeding to wind up Devas that he purports to administer is just the latest and most brazen aspect of India’s plot to avoid its and Antrix’s obligations.”
In November, Devas shareholders had petitioned the US court to confirm ICC’s $1.3 million award owed by the Government of India to Devas nationwide. Devas shareholders are also pursuing seizure of Air India assets, and want to hold Tatas liable, since they are set to acquire the airline.
They are also seeking damages for Antrix’s decision to cancel a 2005 contract for building two satellites for Devas, citing irregularities.
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