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Thursday, July 28, 2016

Devas Antrix Agreement

This article is a consolidation of the Agreement between Devas and Antrix which is in the news at present…


In 2005 a deal was signed between M/s. Devas Multimedia Private Ltd. and government-owned Antrix Corporation.
As per the agreement between the two companies it was agreed upon on points mentioned herewith:
Title of the Agreement: Agreement for the Lease of Space segment capacity on ISRO/Antrix S-Band Spacecraft by Devas Multimedia Pvt. Ltd.

Date of Agreement: 28th January 2005

Signees:
  • Antrix Corporation Limited. Registered office at Antariksh Bhavan, near New BEL Road, Bangalore – 560094 (Executive Director was representing the corporation) ONE Part
  • Devas Multimedia Private Limite, India. Registered Office at 103, Eden Park, 20, Vittal Mallya Road, Bangalore - 560001 (Devas) OTHER Part

Recitals:
  • Indian Space Research Organisation (ISRO), under Department of Space (DOS), Government of India, is a pioneer in the satellite industry with a portfolio of satellite products and services, international experience in satellite manufacturing and launch program management expertise, and satellite network expertise.
  • Antrix is a marketing arm of DOS and is the entity through which ISRO engages in commercial activities.
  • Devas is developing a platform capable of delivering multimedia and information services via satellite and terrestrial systems to mobile receivers, tailored to the needs of various market segments.  
  • Devas requested from Antrix; space segment capacity for the purpose of offering a S-DMB service, a new digital multimedia and information service, including but not limited to audio and video content and information and interactive services, across India that was to be delivered via satellite and terrestrial systems via fixed, portable, and mobile receivers including mobile phones, mobile video/audio receivers for vehicles, etc (“Devas Services”)
  • Antrix was to provide 70 MHz of the scarce S-Band space segment to Devas for its digital multimedia services. Antrix was to lease satellite transponders to Devas for allowing it to offer digital multimedia services using the S-band wavelength (spectrum), reserved for strategic purpose.
  • Antrix agreed upon and decided to make available to Devas, on lease basis, part of a space segment capacity on Primary Satellite 1 (PS1) and an option to gain additional capacity on Primary Satellite 2 (PS2) in the S-Band.
  • Antrix and Devas accepted that they will collaborate to build, launch and operate Satellite(s) and the Devas Services, and recognize that enabling the Devas Services and activities related thereto required execution of interdependent technical and business activities.
Lease Period:
  • Antrix was to lease to Devas on a 24-hour, seven-day-per-week for twelve (12) years basis, which was to renewed two years prior the date of expiry of the lease date.
  • In case of delay of lease from the date of Delivery Date mentioned for operational working, which was to be provided by Antrix, it was Antrix to pay the Delayed Delivery Penalty and incase of prior to the Delivery Date, Devas was liable to pay the Early Delivery Incentive.
Permissions:
  • It was also agreed upon that Antrix would be obtaining all the necessary Government and Regulatory Approvals relating to orbital slot and frequency clearances, and funding for the satellite to facilitate ‘Devas Services’. Antrix was to provide appropriate technical assistance to Devas on a best effort basis for obtaining required operating licenses and Regulatory Approvals from various ministries so as to deliver Devas Services via satellite and terrestrial networks and the cost was to be borne by Devas.
  • In case of PS1, Antrix was to insure and provide Re-launch Guarantee for the satellite and in-orbit operations.   
  • In case of PS2, Devas was to insure risks of failure during launch and in-orbit operations and was to be responsible for meeting any cost of insurance both during launch and in-orbit operations.
Termination of Agreement:
  • Devas may terminate the agreement if there is material breach as per the agreement and Antrix fails to cure the breach within three months after receiving notice from Devas in regards to the nature of breach and reasons. In that case Antrix was to reimburse Devas all the Upfront Capacity Reservation Fees, received by Antrix till that date. In case of such termination none of the party was liable to pay any sum as compensation or damages to the other.
  • Antrix was to terminate the agreement in the event if Antrix was unable to obtain the necessary frequency and orbital slot coordination required for operating PS1 and or before the completing of the Pre Shipment Review of the PS1. In this case Antrix was to immediately reimburse Devas all the Upfront Capacity Reservation Fees received till that date. In case of such termination none of the party was liable to pay any sum as compensation or damages to the other.
  • There were more technical angles termed in the original agreement in regard to termination.
Payments:
  • The payments payable by Devas for the Leased Capacity under the agreement was to be paid advance quarterly, against the invoice raise by Antrix 15 days prior to the quarter of the payable date. Devas was to clear the payment within 30 days (Grace Period) from the receipt of invoice by Devas. Additional charges were agreed upon the rate of ten (10) percent per annum, on any amount not received by Antrix within the Grace Period. As per the agreement, if the delay in the payments extended beyond twelve months after the Due Date; Antrix had the sole discretion to terminate the agreement.
Arbitration:
  • It was agreed upon in the agreement by the two parties (Devas and Antrix) considering all the clauses or provisions provided in the agreement that disputes or difference would be referred to the senior managements of both the parties to resolve within three (3) weeks failing to which it would be referred to an Arbital Tribunal comprising of three arbitrators, one to be appointed by each party, and the arbitrators so appointed would be third arbitrator.
  • The Arbitration seat would be at New Delhi, India.
  • The Arbitration proceeding were to be held in accordance with the rules and procedures of the International Chamber of Commerce (ICC) or United Nations Commission on International Trade Law (UNCITRAL).
  • The Arbitration Tribunal was to reach and render a decision or award in writing (concurred in by a majority of the members of the Arbital Tribunal) with respect to the appropriate award to be rendered or remedy to be granted pursuant to the dispute, (including the amount that any indemnifying Party (Devas or Antrix) was required to pay to the indemnified Party in respect of a claim filed by the indemnified Party).
  • It was agreed upon that the extent practicable all decisions of the board of Arbitration shall be rendered no more that 30 (thirty) days following commencement of proceeding with respect thereto. The Arbital Tribunal would realize its decision on award into writing and cause the same to be delivered to the Parties.
  • Any decision or award made by the board of Arbitration would be final, binding and conclusive on the Parties and entitled to be enforced to the fullest extent permitted by Laws and entered in any court of competent jurisdictions.
  • It was also agreed that each Party to any Arbitration would bear its own costs or expenses in relation thereto, including but not limited to such Party’s attorneys’ fees, if any, and the expenses and fees of the member of the Arbital Tribunal appointed by such party, provided, however, that the expenses and fees of the third member of the Arbital Tribunal and any other expenses of the Arbital Tribunal not capable of being attributed to any one member would be borne in equal parts by the Parties.

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