Devas Multimedia’s Investors Can Seize 50% of Air India’s Assets

A Canadian court ruled that Devas Multimedia’s investors can seize half of Air India’s assets held by the International Air Transport Association (IATA).

Highlights:

  • There will be no seizure of funds belonging to the Airports Authority of India.
  • Court observes that Air India enjoys state immunity as a national carrier.
  • The order comes weeks before the Air India takeover by Tata Sons.

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In a partial victory for India, a Canadian court ruled that Devas Multimedia’s investors could seize half of Air India’s assets held by the International Air Transport Association (IATA). It has also overturned an order authorising the seizure of funds belonging to the Indian Airports Authority (AAI).

Devas shareholders had already acquired authorisation from the Quebec Superior Court on November 24 and December 21 to take assets of AAI and AI held by IATA in conjunction with the two arbitration verdicts it had won for unlawful cancellation of its arrangement with ISRO’s affiliate, Antrix, in 2011.

Devas shareholders then moved to freeze $30 million in assets owned by the two companies, including $17.3 million in ticketing revenues earned on behalf of Air India.

Both Air India and AAI then filed motions in court to have the court’s orders quashed.

On January 8, the Quebec Superior Court denied Air India’s quashing request but altered its previous ruling to limit seizure amounts to 50% of IATA funds. The respite came after Air India stated that its operations would be jeopardised, particularly considering worldwide airline sector disruptions caused by the COVID-19 epidemic.

However, the court allowed AAI’s plea to quash the November 24 order, stating that it was an entity of the Indian state that enjoyed state immunity and that the navigational and aerodrome fees were received on behalf of AAI related to sovereign functions rather than commercial functions.

The verdict comes weeks before Air India’s takeover by Tata Sons’ Talace

Air India and the Ministry of Civil Aviation and have not responded to the ruling yet.

“Without going into detail about the extensive factual allegations aimed at establishing India’s wrongful and abusive conduct toward Plaintiffs, India’s many actions, direct and indirect, within its country’s borders to attack, among other things, the Treaty Awards and to prevent their execution by Plaintiffs is simply mind-boggling, to say the least,” the court observed.

The loss for Air India comes only weeks before Air India privatization and is handed over to Tata Sons, though the new owners are protected from past legal claims.

The three Devas shareholders (Devas Mauritius Ltd, Devas Employees Mauritius Private Limited, and Telcom Devas Mauritius Limited), who filed the case in Canada, have won two international arbitration awards for wrongful termination of their deal with Antrix; $563.5 million from the International Chamber of Commerce in September 2015, and $111 million from the Permanent Court of Arbitration (PCA) in October 2020. The shareholders are attempting to enforce the PCA award through their efforts in Canada.

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Ria is a lead news writer at Aviation Scoop. She writes from dawn to dusk, reads in the evenings, and draws at some ungodly hours. She loathes human interaction and finds solace in the sweet, musky smell of old books, and rain.

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