In 2005, an Indian company called Devas struck a deal to lease two mobile telecom satellites from the commercial arm of the Indian Space Research Organisation, known as Antrix. The government revoked the deal in 2011 on the stated rationale that it had military needs for the bandwidth. Investors say the real issue was that the spectrum had rocketed in value. After Narendra Modi and his party came to power in 2014, federal investigators began probing the satellite deal for corruption – but India never raised corruption as a legal defence. Then India lost a $1.3bn arbitration to Devas for breach of contract, plus a pair of treaty arbitrations worth more than $200m to Devas's foreign investors. Now, as these bills come due, the Modi regime is screaming fraud at every opportunity.

On May 6, Mauritian investors in Devas notified India that they intend to bring a new investment arbitration, on the theory that India is vindictively dismantling Devas so as to dodge payment of the awards that India owes Devas. The investors allege that India crippled Devas through sham investigations and penalties, then successfully petitioned for its creditor's liquidation, and perversely barred the liquidator from trying to collect on Devas's main asset (namely, its billion-dollar arbitration award against India). To be doubly safe, the investors allege, India shielded its Antrix assets by transferring them to a new entity called NewSpace India, and – on the very day that a US court confirmed the billion-dollar award – amended India's arbitration law to stay enforcement where the underlying deal appears to be marred by fraud. 


Whatever India's motive, its legal apparatus has kicked into action. The liquidator soon made an interim finding that the deal had been procured by fraud, and a Bengaluru bankruptcy court held that Devas and Antrix had colluded to abuse the legal process. A special money laundering court agreed to hear an expedited case against Devas in June, while prosecutors also press criminal charges against the individuals who crafted the deal. Meanwhile, the holding that Devas and Antrix abused the legal process is on appeal to the National Company Law Appellate Tribunal. Perhaps most to the point, the Delhi high court is weighing whether to set aside the billion-dollar arbitration award on similar grounds. India's Supreme Court will likely have the last word on all of the above.

Early this year, Devas's Mauritian investors ran in alarm to the US judge in Seattle who had confirmed the billion-dollar award. At first he granted a temporary restraining order to block Devas's parent company from forging a collusive settlement under duress. But a month later, the Seattle judge declined to issue an anti-suit injunction against the Bengaluru bankruptcy court, out of respect for comity. He reasoned that the investors can participate in Indian forums; if the Indian Supreme Court does ultimately set aside the award, then Antrix will move to vacate the US confirmation, and that will be the time for the investors to make their case in Seattle. As the Hague District Court noted when India sought to set aside one of the parallel investment arbitration awards, an investment contract can't possibly be determined null and void until a final decision has been rendered on the claims of criminal illegality.

India's space odyssey shares some of the dynamics that make the Yukos v Russia saga so fascinating. Investors accuse the state of using pretexts to drive a company into bankruptcy out of malice. Then, after losing a number of jackpot arbitration awards, the state suddenly accuses investors of having obtained their investment by corrupt means. The Global Lawyer knows too little about the Devas controversy to offer any thoughts as to the plausibility of either side's allegations. What we can say is that both sides are deploying the armaments of galactic legal warfare with creativity. We doubt the stakes are high enough in India's star wars to inspire as many sequels as in Yukos v Russia. But we will set up our telescope, and watch the legal pyrotechnics as long as they last.

Michael D Goldhaber has been tracking the world’s largest disputes since the turn of the millennium. Email:

This article first appeared in the June/July print edition of fDi Intelligence. View a digital edition of the magazine here.