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Devas Multimedia joins Cairn in its attempt to seize overseas assets of Air India

Devas Multimedia, which had won more than $1.2 billion in international arbitration from India, has dubbed Air India the “alter ego” of the country that is liable for the sovereign’s debts.

June 29, 2021 / 04:19 PM IST

Devas Multimedia Pvt Ltd has joined Cairn Energy Plc in its attempt to seize Air India Ltd’s assets abroad.

Devas Multimedia, which had won more than $1.2 billion in international arbitration from India, has dubbed Air India the “alter ego” of the country that is liable for the sovereign’s debts, Bloomberg reported.

Accordingly, the company has filed a petition in New York asking Air India to forfeit its property in the United States, including planes, cargo handling equipment, and artwork, if it cannot clear the $1.2 billion that India owes Devas.

This move will likely threaten India’s plans to sell off the debt-ridden, loss-making Air India and also tarnish the country’s image as an investment destination.

Last year, India had lost in two international arbitrations – one of which was a $3 billion tax dispute with Vodafone Group Plc and the other was the $1.2 billion dispute with Cairn. Both rulings have been challenged by India.

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The Government of India is also engaged with Devas in multiple court cases that date back to 2011. The dispute had begun after state-owned Antrix Corp had annulled an agreement with Devas citing force majeure. Following this, Devas had claimed that the annulment degraded the value of its multi-million-dollar investments. Devas eventually won the case with an arbitration tribunal awarding the company over $111 million (plus interest) besides the $562.5 million (plus interest) it had won in damages from a separate proceeding at the International Chamber of Commerce.

According to Devas, the sum was never paid by Antrix; on top of that, India is looking for ways to liquidate Devas and investigate alleged fraud. The Supreme Court of India in November 2020 had halted the implementation of the $1.2 billion award, based on the fact that Indian authorities had “discovered a serious fraud in the entire series of transactions leading up to the disputes including the arbitration agreement."



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first published: Jun 29, 2021 04:19 pm
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