A Canadian Court has dismissed Air India’s petition seeking quashing of an order that allowed shareholders of Devas Multimedia Pvt Ltd to seize the airline’s assets. Following this, Devas shareholders said in a statement they can continue to seize up to half of AI funds held at the International Air Transport Association (IATA) retrospectively & prospectively.
Comments from Air India have been sought following this setback & are awaited.
Devas statement says the Canadian Court has "maintained AI seizure & dismissed AI’s motion to quash (earlier order). Reduced AI seizure amounts to 50% of the funds held by IATA retrospectively & prospectively. Dismissed IATA motion to quash the AI’s seizure."
"(The court) granted Airport Authority of India’s (AAI) motion to quash pending service of the proceedings on AAI. In other words, AAI is an agency of the state whereas Air India is not, & as such AAI raised a question of state immunity," Devas statement said, quoting this from the Court order: "The highly detailed & compelling allegations contained in the sworn declarations in support of the two seizures taken, at this juncture, as truthful overwhelmingly satisfy the criterion of the objective fear that the recovery of the amounts due under the treaty awards to plaintiffs would be seriously in peril & jeopardy if the seizures were denied."
A Devas spokesperson had earlier this week said over $30 million have so far been seized under the IATA action. The company has filed several pleas to enforce arbitration awards against the Govt of India.
Airlines pay overflying charges for international flights to IATA, which then gives to different countries’ air navigation service provider (AAI, in India’s case). Travel agents globally use its billing & settlement plan (BSP) as a payment gateway to different airlines. The Tata Group shareholder agreement with the Govt for acquiring AI grants it indemnity from past legal claims against the latter.
Devas Multimedia says it was awarded $1.2 billion compensation by a US court in a 2005 satellite deal case after it won almost a decade-old legal battle against the Indian Space Research Organisation’s (Isro) commercial arm Antrix Corporation.
Following the Canadian Court order last month, AI had on Dec 22, 2021, removed all its ticket inventory from global distribution systems (GDS) as they are linked to IATA’s BSP. This affected AI ticket sales in the peak travel period.
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