Jay Newman, Senior Advisor to Devas Shareholders, said: “India has assets like this all over the world. This is just the beginning. We anticipate many more foreclosures.
Last week, a Canadian court dismissed Air India’s plea seeking the quashing of an order allowing shareholders of Devas Multimedia Pvt Ltd to seize the airline’s assets. Following this, Devas shareholders had said in a statement that they could continue to seize up to half of the AI funds held by the International Air Transport Association (IATA) retrospectively and prospectively.
Devas’ statement said the Canadian court had “upheld AI’s seizure and denied AI’s motion to set aside (earlier order). The reduced AI seizure amounts to 50% of funds held by IATA retrospectively and prospectively. Rejection of IATA’s request to cancel the AI seizure. »
“(The court) granted the motion of the Airports Authority of India (AAI) to vacate the pending service of the proceedings on AAI. In other words, AAI is an agency of the state whereas ‘Air India is not, and as such AAI has raised a state immunity issue,’ Devas had said, quoting this from the court order: ‘The very detailed and compelling allegations contained in the sworn statements in support of the two seizures considered, at this stage, to be true massively satisfy the criterion of the objective fear that the recovery of the sums due under the contractual awards to the plaintiffs will be seriously compromised if the seizures were refused.”
A spokesperson for Devas had earlier said more than $30 million had been seized so far in the IATA action. The company has filed several motions to enforce arbitration awards against the Indian government.
Airlines pay overflight fees for international flights to IATA, which then passes them on to the air navigation service provider of different countries (AAI, in the case of India). Travel agents worldwide use its Billing and Settlement Plan (BSP) as a payment gateway to different airlines. The Tata Group’s shareholders’ agreement with the government for the acquisition of AI grants it compensation for past legal claims against the latter.
Devas Multimedia said it was awarded $1.2 billion in compensation by a US court in a satellite case in 2005 after winning a nearly decade-old legal battle against the commercial arm of the Indian Space Research Organization. (ISRO), Antrix Corporation.
Following the Canadian court order last month, AI had, on December 22, 2021, removed all of its ticket inventory from Global Distribution Systems (GDS) as they are linked to IATA’s BSP. This affected AI ticket sales during the peak travel period.