Monday, January 03, 2022

Canada court orders seizure of Air India, AAI dues on Devas investors' plea

Mumbai/Delhi: A court in Canada has ordered seizure of amounts collected by the International Air Transport Association (IATA) on behalf of Air India and the Airport Authority of India (AAI).

Separate orders were passed on November 24 and December 21 on pleas by shareholders of Devas Multimedia Private Limited, who have filed multiple petitions to enforce arbitration awards against the Indian government.

Around $6.8 million belonging to the Airport Authority of India has been seized as a consequence of the order. The exact amount due to Air India that is held up due to the order is not known.

The development comes weeks before the Tata group takeover of the national airline after a successful bid last year. The group has been granted indemnity from past legal claims in its shareholder agreement with the government.

Three shareholders of Devas who won a $111 million arbitration award against the government moved the Superior Court in Quebec for enforcement and on their applications the garnishment orders were issued.

“We will pursue the Indian government in courts worldwide to ensure the debts owed to Devas are satisfied. Our action in Canada has resulted in millions of dollars garnished by Devas shareholders, and represents the first fruits of a globally-focused effort to be paid,” said Matthew D McGill, partner at Gibson, Dunn & Crutcher and lead counsel for several shareholders.

“Devas shareholders have been clear from the start: Despite state-sponsored investigations intended to intimidate and scare-off the victims of India’s unlawful acts, we will continue to pursue the Indian government’s assets to satisfy the awards, while remaining open to an amicable settlement,” McGill added.

Emailed queries to the Ministry of Civil Aviation did not yield any response. “On the intervention of Air India’s counsel, the commercial division of the Quebec Superior Court accepted to designate a judge on an urgent basis to hear the applications of quash and seizures brought by Air India, AAI and IATA. The hearing will take place on January 4, a day on which court would normally be closed due to the holidays,” a senior government official said.

IATA assists airlines and air navigation service providers in collecting monies due from ticket sales and route navigation charges. Its billing and settlement plan (BSP) mechanism acts as a payment gateway for travel agents around the world. Remittances for ticket sales are made to an airline through the BSP. Similarly, it collects route navigation charges from foreign airlines operating to India and for flights overflying the country and passes them to the Airport Authority of India.

03/01/22 Aneesh Phadnis & Arindam Majumder/Business Standard


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