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.
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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