Blow to India as arbitration tribunal rules against Antrix
Aug 04, 2016
A Permanent Court of Arbitration (PCA) tribunal in The Hague has ruled against Antrix Corporation, the commercial arm of India’s space organisation, ISRO, in the ongoing case with Devas Corporation over sharing of spectrum on satellites.
Ruling by the Arbitration:
- The Permanent Court of Arbitration (PCA) in the Hague, the Netherlands, ruled that India was liable to pay compensation to Devas for cancelling the contract and award of spectrum to the company on grounds of national security.
- The tribunal has said that government of India’s essential security interest provisions of the treaty do apply in this case to an extent. The limited liability of compensation shall be limited to 40% of the value of the investment
- Panel had found no evidence that the agreement had been struck to benefit “anybody’s self-interest
The problem arose when, after the CAG estimated the A Raja scam at Rs1.76 lakh crore, it applied the same logic to Antrix-Devas since this was also spectrum. As compared to the pittance Devas was paying, the 2010 auctions fetched Rs 642 crore per Mhz for the BWA spectrum and Rs 3,340 crore for 3G spectrum. Based on this, it could be argued –though CAG did not estimate a loss as it did in the Raja case – that the ‘losses’ ranged from Rs 45,000 crore to Rs 235,000 crore, depending upon whether you use the BWA or the 3G spectrum as the comparator. Unnerved by the CAG draft, the government set up two committees which recommended scrapping the deal.
What is Permanent court of Arbitration(PCA):
It was established in 1899 to facilitate arbitration and other forms of dispute resolution between states. The PCA is not a court in the traditional sense, but a permanent framework for arbitral tribunals constituted to resolve specific disputes.