The Department of Space (DoS) has prepared a draft note for the Cabinet Committee on Security on the issue of annulment of the deal between Antrix Corporation and Devas Multimedia.
The note has recommended that the government, in exercise of its sovereign power and function, may take a policy decision to the effect that due to strategic requirements it would not be able to provide Antrix the orbit slot in S-band to operate the satellite, which was proposed to be launched for use by Devas.
DoS put out on Thursday the detailed background paper on the options available for an annulment. It said:
“The Ministry of Law and Justice opined that as per Article 7(c) of the Agreement, Antrix may terminate the Agreement in the event it is unable to obtain necessary orbit slot.
“Therefore, the government in exercise of its sovereign power and function may take a policy decision to the effect that due to strategic requirements, it would not be able to provide orbit slot in S-band for operating PS-1 to Antrix for commercial activities. In that event, Antrix in terms of Article 7(c) read with Article 11dealing with Force Majeure may terminate the Agreement and inform Devas accordingly. However, on such termination Antrix shall be required to reimburse Devas all the Upfront Capacity Reservation Fees and corresponding service taxes received by Antrix till that date.
“Additional Solicitor General also opined that the annulment should be done through a policy decision taken at the level of Government of India, acting in its Sovereign capacity.”
The background paper said the draft note for the CCS was under circulation for comments of the Ministries of Law and Justice, Telecom, Finance, Defence, Home Affairs and External Affairs. It will be placed before the CCS for a decision by the government.
The six-page document, which gives a detailed account of the deal, noted that Antrix had signed a Memorandum of Understanding with Forge Advisors in March 2003 to “explore opportunities in digital multi-media services” and that the U.S. firm consequently set up Devas Multimedia. It asserted that the government was “under no obligation” to utilise the GSAT-6 and GSAT 6A satellites for the Antrix-Devas contract as the proposals of the Department of Space for the building of the two satellites did not make any reference to their utilisation for the agreement.
“In December 2005, the Union Cabinet approved building of the GSAT-6 satellite at a cost of Rs. 269 crores, following the approval given by the Space Commission in May 2005.
“In October 2009, the Space Commission approved building of the GSAT-6A satellite at a cost of Rs. 147 crores under the Commission's delegated powers. The launch cost of the Satellites was Rs. 350 crores.
“The proposals of the Department in both cases did not make any reference to their utilization for the Antrix-Devas agreement. Accordingly, the Government of India is under no obligation to utilise these satellites for the Antrix-Devas contract.”
The Space Commission under the Department of Space is to meet on Saturday to discuss the developments. Senior ISRO officials, however, maintained that it was a routine meeting and was scheduled in advance.
The Space Commission is headed by K. Radhakrishnan, Secretary, Department of Space and ISRO Chairman. It has Cabinet Secretary K.M. Chandrasekhar, National Security Adviser Shiv Shankar Menon, Principal Secretary T.K.A. Nair, Principal Scientific Adviser to the Government R. Chidambaram, ISRO Satellite Centre (Bangalore) Director T.K. Alex, aerospace scientist Roddam Narasimha, and the Expenditure Secretary in the Finance Ministry as members. V.V. Bhat is its Member (Finance).