The Delhi high court on Friday dismissed a plea by satellite services provider Devas Multimedia Private Limited, which had challenged a single-judge order that set aside compensation of ₹15,000 crore awarded to it by an international arbitration court.

The dispute relates to Devas’s suit against Antrix Corporation Limited, the commercial arm of India’s space agency Indian Space Research Organisation (Isro), which scrapped a deal for the former to offer multimedia services via two satellites to be deployed by the space agency.

In what turned into one of the most controversial contracts in India’s space sector, the deal was shrouded in allegations of corruption before it was scrapped and triggered multiple legal battles once scrapped. One of them was Devas’s suit at the International Chamber of Commerce (ICC) tribunal, which asked Antrix to pay ₹15,000 crore to Devas for the scrapped contract.

The Delhi high court, however, put aside this award in August 2022, after a separate arbitration suit filed by Antrix accusing Devas of being set up fraudulently held the matter in favour of the Indian space company.

Justice Sanjeev Sachdeva, the judge of the single-judge bench, had also said the award in conflict with the “public policy of India”. Challenging the judgment, Devas had moved the division bench of the high court.

Dismissing the Devas appeal, a bench of chief justice Satish Chandra Sharma and justice Subramonium Prasad said it is “well established” that Devas was incorporated with fraudulent intentions so that it could enter into the agreement with Antrix.

“Permitting Devas and its shareholders to reap the benefits of the ICC Award would amount to this Court perpetuating the fraud. Such a view would be against all principles of justice, equity and good conscience,” the high court said in a 132-page judgment.

The court said that the fraud propagated by Devas is not only against Antrix, but against the state as a whole, in as much as it attempts to obtain monetary benefits from the State itself, by attempting to enforce an arbitral award, which itself arose out of fraud.

“A fraud of such scale would certainly render the award to be in conflict with the public policy of India,” the court said.

The controversy relates to a 2005 contract between Devas and Antrix for satellite services. There were allegations that because the deal involved allotting of spectrum, it led to a loss of ₹2 lakh crore, prompting the then UPA government to cancel it, citing national security interests.

Devas then filed three arbitration suits and won all of them, which ordered India to pay a total of $1.29 billion in damages. The private company filed confiscation requests of Indian assets in foreign jurisdictions to recover this award. A court in France attached a flat owned by the Indian government, while a court in Canada attached a number of Airports Authority of India and Air India (which was then under the government) assets.

Antrix hit back with its own arbitration, alleging Devas in India should be wound up. The suit, filed at the National Company Law Tribunal, was settled in Antrix’s favour, and subsequent appeals at the appellate tribunal (NCLAT) and Supreme Court reiterated the NCLT decision.

The August 2022 Delhi high court order relied on this to scrap the ICC tribunal award.

The judge, citing the Supreme Court’s decision, said at the time that the “seeds of the commercial relationship between Antrix and Devas were a product of fraud perpetrated by Devas and thus, every part of the plant that grew out of those seeds, such as the agreement, the disputes, arbitral awards, etc, are all infected with the poison of fraud”.

Devas challenged the single-judge bench’s order before a division bench, arguing that Antrix was not entitled to terminate the agreement. A bench of chief justice Satish Chandra Sharma and justice Subramonium Prasad reserved its order on the matter on December 16.

In its judgment while dismissing the appeal by Devas, the bench said that Devas could manage to enter into agreement with Antrix only by conniving and colluding with the then officials of Antrix, adding that the “collusion between the officials of DoS and Antrix is borne out from the Note for the 104th Space Commission which did not contain any references to the Devas Agreement.

“The cabinet note dated November 17, 2005, which was prepared 10 months after the signing of the Devas agreement did not make any mention about Devas or the agreement, but the cabinet proceeded on the basis that ISRO had received multiple expressions of interest from various entities… the cabinet was kept completely in the dark and material information was suppressed by Devas when Cabinet approval was obtained by Devas”.

“Further, the cabinet was misled to believe there are several firm expressions of interest before ISRO, even though the agreement was granted only to Devas. Devas has thus not only suppressed, but also misrepresented information in order to pursue its fraudulent activities in India,” the court said.