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बेसिक इंग्लिश का दूसरा सत्र (कक्षा प्रारंभ : 22 अक्तूबर, शाम 3:30 से 5:30)
Q. Verdict against Antrix Corporation: In the backdrop of recent verdict of the Permanent Court of Arbitration tribunal at The Hague against Antrix, discuss the issue in detail.
Jul 29, 2016 Related to : GS Paper- 2 and 3

Ans :

Introduction-

Recently permanent court of arbitration tribunal at The Hague ruled verdict against Antrix Corporation in its dispute with Bangalore based Devas Multimedia. Antrix Corporation is an commercial arm of India Space Reserch Organisation (ISRO).

Antrix- Devas deal-

  • In 2005 Antrix and Devas entered into an agreement for the long-term lease of two ISRO satellites operating in the S-band.
  • The deal was for 70 MHz of S-Band frequency used to provide multimedia services by leasing most of the transponders on the GSAT-6 and GSAT-6A satellites for 12 years.
  • Devas was to pay $300 million over the said period.
  • However, after reports of unilateral process and presumptive loss to exchequer due to the deal then government annulled the contract in August 2011.
  • Following this the U.S. investors in Devas moved a case against Antrix at  International Chamber of Commerce’s (ICC) arbitration court.
  • In September 2015 the ICC ruled that Antrix must pay $672 million to Devas Multimedia as compensation for their loss.
  • In 2015 government appealed against the above order at The Permanent Court of Arbitration (PCA) in The Hague, and recently the tribunal issued its ruling.

Ruling of tribunal at The Hague-

  • Tribunal at The Hague has found that the government’s actions in cancelling the contract between Devas and Antrix Corporation and denying Devas commercial use of S-band satellite spectrum constituted an expropriation.
  • By annulling the contract India has breached its treaty commitments to accord fair and equitable treatment to Devas’s foreign investors.
  • The tribunal has ruled on jurisdiction and liabilities and the ruling on damages not yet issued.

Impact of ruling-

  • Following this verdict, India is now liable to pay financial compensation to Devas Multimedia.
  • The ruling could have a bearing on other Indian government decisions that private companies have contested. For ex. Case against Vodafone on retrospective taxation.
  • It is probably the most serious crisis that the widely respected ISRO has ever faced. This fiasco has exposed institutional failings in an organisation that is often cited as an example of professional excellence.

Conclusion-

The recent ruling by the tribunal at Hague is major setback for India. Similarly the ruling has bearing on other issues between Indian government and private companies and it may have negative impact about investments in India. Hence government and its agencies must be very careful while forging agreements with private firms in future.


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