Devas Multimedia, a company claiming more than $ 1.2 billion in international arbitration from India, has welcomed India’s move to lift retroactive corporate tax claims. However, the company stressed that the bill does not address the issue of recognizing international arbitral awards and said it would continue the fight to enforce its legal rights.
“The legislature’s reports, if true, are an encouraging sign that India intends to reverse its course in its shabby treatment of investors. However, the bill does not address India’s refusal to recognize international arbitration awards or bilateral investment treaties. We hope this changes, but until then, Devas shareholders will enforce our legal rights in India and around the world for as long as it takes to get justice, ”said Jay Newman, Senior Advisor to Devas Shareholders’ .
The Lok Sabha on Friday passed the Taxation Laws (Amendment) Bill 2021, which aims to withdraw tax claims made under a retrospective 2012 law to tax indirect transfers of Indian assets. The bill provides for the withdrawal of tax claims for “indirect transfers of Indian assets if the transaction was carried out before May 28, 2012, the date the retrospective tax legislation came into effect”.
The new law will settle multi-billion dollar tax disputes and remove all back tax claims against companies like Cairn Energy and Vodafone. The government has also proposed reimbursement of the amount paid by companies in litigation without interest.
Devas and the Center are embroiled in multiple lawsuits around the world in which Devas is demanding the prize money, while India is looking to liquidate the company and investigate a suspected fraud. The matter goes back to 2005 about a failed satellite contract between Devas and the ISRO-controlled Antrix Corp. return. Under the agreement, ISRO was to lease two communications satellites to Devas for 12 years at a cost of Rs.167 billion. The start-up was to provide video-audio services to mobile platforms in India using the S-band spectrum transponders on ISRO’s GSAT 6 and 6A satellites, built by ISRO for 766 billion rupees.
An arbitration tribunal awarded Devas more than $ 111 million plus interest in 2020. Devas also received $ 562.5 million in damages plus interest from separate proceedings before the International Chamber of Commerce.
Recently, Devas filed a petition in New York asking Air India to pay the amount or forfeit its U.S. property including airplanes, cargo handling equipment and artwork.