In a victory for the shareholders of satellite company Devas Multimedia in its legal struggle with India, a Canadian court has reportedly ordered the seizure of assets belonging to the Airport Authority of India (AAI) and Air India held with the International Air Transport Association (IATA).
The Superior Court of Quebec issued two separate decisions on November 24 and December 21, demonstrating that the IATA has confiscated assets belonging to the AAI valued at approximately $6.8 million. The exact value of the Air India assets seized is not revealed. According to an ET article, representatives of the shareholders stated that $30 million had been taken so far due to the IATA action.
The news is significant because the government signed a share purchase agreement with Tata Sons to sell the national carrier for Rs 18,000 crore. Tata’s deal with the government to buy Air India included indemnification from earlier legal claims against the latter.
Devas investors approached international courts against India
Devas has been relentless in its pursuit of Air India’s seizure, winning several arbitral awards, including a $1.3 billion inclusive of interest and other charges, the award from the International Chamber of Commerce’s court of arbitration in 2011 for a cancelled satellite deal with the Indian Space Research Organisation’s (ISRO’s) commercial arm Antrix Corporation.
According to the financial daily, Devas’ overseas investors have taken their case to courts in the United States, Canada, and other countries, accusing India of failing to honour arbitral rulings and attempting to seize the country’s assets abroad. They also enlisted the services of Jay Newman, a former Elliott Management officer, to collect the arbitration award.
“Our action in Canada has resulted in millions of dollars being garnished by Devas shareholders and represents the first fruits of a globally focused effort to be paid,” Matthew D McGill, Partner at Gibson, Dunn & Crutcher and Lead Counsel for several of the shareholders said. In a statement released on Monday, McGill stated, “Our enforcement in Canada underlines the fundamental legal principle understood worldwide that deadbeat debtors must pay what they owe.”
An arbitration tribunal awarded Devas approximately $111 million in interest in 2020 as compensation for the expropriation of 40% of their stake in Devas satellite company.
According to the daily, an Air India executive declined to comment, while calls to an AAI official went unanswered.