Air India Assets Will Be Seized From IATA, Canada Court Orders (Here’s The Reason Why)
A court in Canada has ordered amounts collected by the International Air Transport Association (IATA) on behalf of Air India and the Airport Authority of India (AAI) to be seized.
The situation has to do with a claim by Devas Multimedia Private Investment against the Indian government represented by Air India and the AAI.
IATA here serves as a middle man in many airline and airport transactions which explains its involvement in the case.
It collects funds from ticket sales and route navigation charges, the former of which it pays out to the airlines and the latter to the airports authority.
Ahead Of AI Takeover
The development comes just ahead of the Tata group takeover of Air India post its successful bid in 2021.
It has been granted indemnity from past legal claims in its shareholder agreement with the government.
Devas Multimedia says it was awarded $1.2 billion compeonation by a US court in a 2005 satellite deal case.
Awards From Long Legal Battle
It was awarded the amount after it won a near decade long legal battle against the Indian Space Research Organisation’s commercial arm Antrix Corporation.
In a statement it said that its shareholders have been given the right to “garnish property belonging to AAI held by IATA in Montreal”.
IATA has to garnish, among other things, air navigation charges and aerodrome charges, held by IATA, either at its Montreal head office or any of its branches worldwide.
Part Of Large-Scale Efforts
It said that these actions “represent the first fruits of a globally focused effort to attach assets of the Indian government to satisfy the Devas Multimedia’s awards”.
Lead counsel for several Devas’ shareholders Matthew D McGill said that the shareholders will pursue the Indian government to recover the debts it owes to Devas.
Amicable Settlement Possible
In order to pay what they owe, the debtors’ income and assets “will be garnished to pay those debts”.
He added that while they will “continue to pursue Indian government’s assets to satisfy the awards” they remain open to an amicable settlement.