ISRO Antrix scam: 1 billion dollar claim against Antrix in Intl. Court of Justice, The Hague.

Adding insult to injury is the arbitration filed against ISRO by Devas Multimedia in the International Court of Justice in Hague, the Netherlands, for cancelling a commercial deal by which the space agency was to build two communication satellites GSAT-6 and GSAT 6A for Devas. “Devas is claiming damages worth $1,000 million from Antrix, which will make the company bankrupt,” a senior ISRO scientist told The Pioneer.

According to a senior ISRO scientist, the two satellites would have fetched ISRO Rs 1350 crore from Devas, the Bangalore-based company. “Antrix, the marketing arm of ISRO would have got 15 per cent of the profit to be earned by Devas,” he said. ISRO was to lease 70 MHz of its 150 MHZ spectrum allotted to its satellites in orbit to Devas. This would have made ISRO earn $9 million every year as lease fee from Devas. The company with a host of foreign investors was also supposed to pay $20 million in three equal installments to ISRO according to the deal.

Priorities have changed in the ISRO headquarters at Bangalore since the last six months. ISRO chairman K Radhakrishnan, who is on the verge of retirement, is busy lobbying for an extension through his new-found mentor K Narayanasamy, Minister of State in the PMO. He has to put in extra efforts as there are two more contestants viz AS Kiran Kumar, director, Space Application Centre, Ahmedabad and MYS Prasad, director, Satish Dhavan Space Centre, Sriharikota.

The Comptroller and Auditor General of India came out with a scathing report in 2010 terming the Antrix-Devas deal as a case of public investment for private profit. “Selected individuals were able to propel agenda of a private entity,” said the CAG report tabled in Parliament. The report and the resultant “probe” by a Department of Space team led to black listing of four top space scientists G Madhavan Nair (who headed ISRO from 2003 to 2009), A Bhaskaranarayana, scientific secretary, DOS; KR Sridharamurthy CEO, Antrix Corporation and KN Sankara, director, ISRO Satellite Centre, Bangalore vide a Government order dated January 26, 2012.

It is strange that no action was taken on the IAS officers who were named along with the top scientists. Though the draft CAG report highlighted presumptive loss of Rs 2.5 lakh crore the final report submitted to Parliament is totally silent on it. Interestingly, efforts by Central investigating agencies has not brought out any financial irregularities in the deal. The Antrix-ISRO deal was cancelled by the Government of India in 2011 following the report of Radhakrishnan.

Subsequent inquiries by Chaturvedi Committee has not found any wrongdoing other than “not keeping the Government adequately informed”. But the top echelons in the PMO were kept in the loop about each and every move by ISRO. “Let them come out with an argument that they were not informed about the process,” said the senior scientist. He said that the present chairman Radhakrishnan doctored the Pratyush Sinha Panel to recommend action against the personnel involved in the Antrix-Devas agreement.

What stands in contrast is that the Sinha Panel had stated that no action could be taken the scientists and ISRO was told by the Government’s law officers that the four scientists should be given opportunity to air their views following the decision to blacklist them.

Initial reports in some section of the media said the country would have lost Rs 2,00,000 crore by the Antrix-Devas deal. But it has not been substantiated with proof. Since the draft CAG report came immediately after the 2G spectrum allocation scam, the word spectrum in the Antrix-Devas deal created a major misunderstanding. “There is a world of difference between the cost of satellite spectrum and the terrestrial spectrum. Satellite-based spectrum costs about one-thousand times less than the ground-based spectrum,” Madhavan Nair, former ISRO chairman had told mediapersons after the publication of the draft CAG report. This was not taken seriously.

With the SC rejecting the pleas of ISRO not to give permission to Devas to question the cancellation of the deal in the Permanent Court of Justice in the Hague, stage is set for one of the most expensive international legal war.

Top scientists in ISRO say that Devas, supported by many powerful investors from the USA the UK and Germany are on a strong wicket. “They are claiming damages of the order of $1000 million saying that the unilateral annulment of the deal by the Department of Space on a flimsy ground is not acceptable under the Bilateral Investment Protection Agreement (BIPA). It provides only for arbitration to ensure security of the Foreign Direct Investment,” said a top space scientist, a member of the ISRO team which finalised the Antrix-Devas deal.

According to an ISRO source, ISRO spent Rs 5 crore as legal fees in the recent case in the Supreme Court. The DoS has engaged Khaitan &Co, New Delhi and M/s Curtis, Mallet-Prevost, Colt& Mosle LLP New York. These companies are known for their exorbitant charges. “If these are the companies representing the Government of India, I am sure, they are going to charge not less than Rs 1 crore per hearing,” said a legal expert from Kochi familiar with such cases.

It is known that the DoS will not be able to win this case and has to pay heavy compensation. “The present chairman totally misguided the Government based on his whims and fancies. A wise way would have been to renegotiate and escalate the contract value sufficiently at present level of commercial transactions and levy high charges for terrestrial links which is anyway is out of the DoS/Antrix contract with Devas. Either they would have agreed or disagreed and cancelled the contract on their own,” said the senior ISRO scientist.

Interestingly, the ISRO scientific community sees something fishy in the entire episode. “They have singled out four top space scientists and punished them by denying them any role in Government of India projects. But why they are not initiating legal proceedings against these scientists if the Government is so confident of their culpability in the case?” asked serving scientists in ISRO.

Scientists in ISRO who spoke to The Pioneer said that lack of technical understanding and over enthusiasm of Radhakrishnan to please his political bosses has led to the cancellation of Devas agreement. Had the agreement been implemented, the country would have seen villagers speaking to their friends and relatives with hand held mobile phones connected directly via satellite.