The deal with Devas was struck by Antrix, the commercial branch of ISRO (File Photo)
India has lost a major case in international arbitration involving spectrum and satellites and may have to pay up to a billion dollars in damages. Today's verdict from the International Tribunal at the Hague could further the perception of India as an unreliable recipient of foreign investment, one who is prone to abrupt policy changes.
Here is your 10-point cheat-sheet to this big story:
The case in the Hague was filed against the government of India by Devas Multimedia, a telecom firm based in Bengaluru with a roster of US investors.
In 2005, Devas was told it could use valuable S-band spectrum by leasing space on two Indian satellites.
The deal with Devas was struck by Antrix, which the commercial branch of the state-run Indian Space and Research Organisation or ISRO. Antrix is meant to monetise a selection of ISRO services by offering them to private firms.
Devas planned to use the leased satellite transponders and spectrum to provide broadband and multi-media services across the country including in remote areas. Antrix agreed that the satellites needed would be built by ISRO.
Antrix was to be paid nearly 600 crores over 12 years. But in 2011, the contract was cancelled. The government of Dr Manmohan Singh said that it had not signed off on ISRO's plans to build the satellites.
Antrix was also charged with not following a bidding process in allocating the satellite space and spectrum to Devas.
The decision was seen as heavily influenced by the blockbuster 2g scam, which had besieged Dr Singh's government, with allegations of sweetheart deals to telecom firms who were given second-generation or 2G airwaves.
Investigators said that former ISRO officials had been hired by Devas and they helped in skewing the deal heavily in the telecom's favour.
Madhavan Nair, who headed ISRO when the Devas deal was signed, was blacklisted for any government role and investigated for charges of corruption. Mr Nair told NDTV today that the international verdict against India is the "result of thoughtless action and hasty reaction" by the government.
The damages, said sources familiar with today's verdict, could be in the range of a billion dollars based on precedent in similar cases. They also said that Devas is likely to be entitled to about $750 million, and its US investors, who sued the government separately, are likely to win about $300 million in the coming months.
