Devas joins Cairn in trying to seize Air India’s overseas assets

By Upmanyu Trivedi and Anurag Kotoky

Devas Multimedia Pvt., a company seeking over $1.2 billion it won in international arbitration from India, has joined Cairn Energy Plc in seeking to seize Air India Ltd.’s assets abroad.

Calling the flagship airline an “alter ego” of the Indian state and therefore liable for the sovereign’s debts, Devas filed a petition in New York asking Air India to pay the amount or forfeit its US property including planes, cargo handling equipment and artwork.

The move may threaten India’s much-delayed plans to sell the indebted loss-making carrier and risks denting India’s image as an investment destination. India last year suffered two big losses in international arbitrations -- the $3 billion tax dispute with Vodafone Group Plc and the $1.2 billion dispute with Cairn. India has challenged both rulings.

Around the time of Cairn’s petition in May, Indian authorities asked state-run banks to protect their dollar deposits on concern that these could also be at risk of seizure, Bloomberg News had reported.

Indian authorities and Devas are engaged in multiple court cases globally in which Devas seeks the award money while India wants to liquidate the company and investigate an alleged fraud.

Also read: After Air India, Cairn to target more state companies to recover its dues from government

The dispute goes back to 2011, when an Indian state-owned company Antrix Corp. annulled an agreement with Devas citing force majeure. Devas said in its petition that the annulment eroded the value of its multi-million dollar investments. An arbitration tribunal in 2020 awarded Devas more than $111 million plus interest. Devas also won $562.5 million in damages plus interest from separate proceedings at the International Chamber of Commerce.

Devas says Antrix has paid neither of these. An Air India spokesman declined to comment. A representative for the Indian Space Research Organisation, which controls Antrix, didn’t immediately respond to requests for comments.

India’s top court in November had halted implementation of the $1.2 billion award after the country’s Attorney General K.K. Venugopal denied possibility of a settlement saying Indian authorities have “discovered a serious fraud in the entire series of transactions leading up to the disputes including the arbitration agreement.” Lawyers for Devas had denied the allegations.

On a petition by Antrix, a company court in India last month ordered winding up Devas. An appeal is pending hearing in an appellate court.