Air India has informed the US court that it has signed a “share purchase” agreement with Tata Sons with a sale likely to close by the end of 2021 or 2022, and that this will result in Air India no longer being a government asset
Air India, being bought by the Tata Group, has approached a US federal court and sought a stay on efforts by foreign investors in Bengaluru start up Devas Multimedia Pvt Ltd to attach the assets of the public sector carrier as part of efforts to recover compensation awards made against state-run ISRO’s commercial arm, Antrix Corporation, over a failed 2005 Devas-Antrix satellite deal.
Air India has moved the US court for southern district of New York to stay and dismiss efforts by three Mauritius-based investors in Devas Multimedia and German telecom major Deutsche Telekom to identify Air India as an alter ego of the Government of India to recover compensation awards made by international tribunals against ISRO’s Antrix Corp over the failed 2005 satellite deal.
Air India has informed the US court that it has signed a “share purchase”agreement with Tata Sons with a sale likely to close by the end of 2021 or 2022, and that this will result in Air India no longer being a government asset or an alter ego of GoI.
Mauritius-based investors in Devas Multimedia — CC/Devas Mauritius, Telcom Devas Mauritius and Devas Employees Mauritius Pvt Ltd — have written to the court through a lawyer, stating that sale of Air India will not affect recognising the airline to be an asset of GoI.
“India’s sale of Air India will not impair — much less destroy — the Court’s ability to grant Plaintiffs effective relief,” the Devas investors stated in a November 15 letter to the US federal court through legal representatives. “Air India suggests that its sale to Tata Group will eliminate any possibility that Air India could remain an alter ego of India. Even if that were true as a factual matter — and it is not necessarily so — Air India is looking ahead, whereas the law looks back.
“The relevant time period for determining whether Air India is India’s alter ego is before this action was filed…. Air India is India, and is liable for India’s failure to pay the award.”
The US court is scheduled to take up the pleas of Air India and Devas investors in the coming weeks.
The Mauritius investors in Devas Multimedia were awarded a $ 111 million compensation by a tribunal of the United Nations Commission on International Trade Law on October 13, 2020 following an arbitration process over alleged violations by the Indian government of a bi-lateral investment treaty with Mauritius.
Earlier this year, CC/Devas Mauritius, Telcom Devas Mauritius and Devas Employees Mauritius Pvt Ltd, and later Deutsche Telekom, had approached the Southern District of New York court with a plea to declare Air India an alter ego of India, and to allow attachment of Air India properties in order to enforce payment of compensation awarded by international tribunals in favor of the investors.
The investors have also moved a US federal court seeking enforcement of the arbitration award. Deutsche Telekom was awarded a compensation of $101 million plus interest by the Permanent Court of Arbitration in Geneva on May 27, 2020. The firm has moved the US federal court in the district of Columbia for confirmation of the award.
The Mauritius investors have sought an order for declaring Air India as being indistinct from the Indian government and says that Air India should be made jointly liable “for debts and obligations of India itself”. The move by the Mauritius shareholders in Devas to seek attachment of Air India properties came earlier this year even as a Bengaluru bench of the National Company Law Tribunal ordered liquidation of Devas Multimedia on May 26 on the grounds that the firm was created fraudulently.
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