The latest reports reveal that the Devas Multimedia Pvt. has joined forces with Cairn Energy Plc in seeking to seize Air India Ltd.’s assets abroad.
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How Did This Happen?
Devas Multimedia Pvt. seeking over $1.2 billion, it won in international arbitration from India.
Devas filed a petition in New York further calling the flagship airline an “alter ego” of the Indian state and therefore liable for the sovereign’s debts.
The multimedia firm is asking Air India to pay the amount or forfeit its U.S. property including planes, cargo handling equipment and artwork.
This development is likely to threaten India’s much-delayed plans to sell the indebted loss-making carrier and risks denting India’s image as an investment destination.
Losses In International Arbitration
Last year, India suffered two big losses in international arbitrations, one was the $3 billion tax dispute with Vodafone Group Plc and the second $1.2 billion dispute with Cairn.
Although, India has challenged both the rulings.
As per the earlier report, authorities asked state-run banks to protect their dollar deposits on concern that these could also be at risk of seizure,at the time of Cairn’s petition in May.
Tangled With Devas
So far, Indian authorities and Devas are engaged in multiple court cases globally.
In these cases, Devas seeks the award money while India wants to liquidate the company and investigate an alleged fraud.
Actually, the dispute goes back to 2011 when an Indian state-owned company Antrix Corp. annulled an agreement with Devas citing force majeure.
The annulment eroded the value of its multi-million dollar investments, said Devas in its petition.
In 2020, an arbitration tribunal awarded Devas more than $111 million plus interest.
In addition to that, Devas also won $562.5 million in damages plus interest from separate proceedings at the International Chamber of Commerce.
Now, Devas says Antrix has paid neither of these.
On this subject, an Air India spokesman declined to comment.
Fraud In Transaction
In November, the Supreme Court had halted implementation of the $1.2 billion award after the country’s Attorney General K.K. Venugopal denied the possibility of a settlement.
Saying Indian authorities have “discovered a serious fraud in the entire series of transactions leading up to the disputes including the arbitration agreement.”
Whie, lawyers for Devas, had denied the allegations.
A company court in India last month ordered the winding up of Devas, on a petition by Antrix.
Currently, an appeal is pending hearing in an appellate court.
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