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Lawyers, other representatives, expert(s), tribunal’s secretary

Judgment of the Hague Court of Appeal

1. The proceedings on appeal

1.1.

By writ of 12 February 2019, the Republic of India filed an appeal against the judgment that the District Court of The Hague had issued between the parties on 14 November 2018. In a Statement of Grievances accompanied by exhibits, the Republic of India submitted nine grievances. In the Statement of Defence, Devas et al. challenged the grievances.

1.2.
Subsequently, on 3 December 2020, the parties had their case argued, the Republic of India by its lawyer and Devas et al. by their lawyer and Ms Van der Plas-Hoebeke, a lawyer practising in Amsterdam, all based on the written submissions that had been filed. The Republic of India moreover filed some additional exhibits. One of these exhibits, a letter from the Additional Solicitor General of India of 30 November 2020 (Exhibit 163), was rejected because it had not been sent to this Court and the counterparty in good time before the hearing. Finally, this Court scheduled a date for judgment.

2. The Facts

2.1.
The facts established by the District Court in its judgment of 14 November 2018 are not in dispute. This Court will also proceed on that basis. This case turns on the following.
2.2.

On 20 June 2000, a bilateral investment treaty (hereinafter referred to as "the Treaty") between the Republic of India and the Republic of Mauritius (hereinafter referred to as the "Contracting Parties") entered into force. The Treaty's object is to promote investments by Mauritian investors in India and investments by Indian investors in Mauritius. Article 8 of the Treaty provides for arbitration to resolve disputes between an investor from one of the Contracting Parties and the other Contracting Party.

2.3.

Article 1(1)(a) of the Treaty defines 'investment' as follows:

"investment" means every kind of asset established or acquired under the relevant laws and regulations of the Contracting Party in whose territory the investment is made, and in particular, though not exclusively, includes:

"(i) movable and immovable property as well as other rights in rem such as mortgages, liens or pledges;"

"(ii) shares, debentures and any other form of participation in a company;"

"(iii) claims to money, or to any performance under contract having an economic value;"

"(iv) intellectual property rights, goodwill, technical processes, know-how, copyrights, trade-marks, trade-names and patents in accordance with the relevant laws of the respective Contracting Parties;"

"(v) business concessions conferred by law or under contract, including any concession to search for, extract or exploit natural resources;"

2.4.

Article 11(3) of the Treaty provides the following regarding "essential security interests'"-.

"The provisions of this Agreement shall not in any way limit the right of either Contracting Party to apply prohibitions or restrictions of any kind or take any other action which is directed to the protection of its essential security interests (...). "

2.5.
Devas et al. are the indirect shareholders of the Indian company Devas Multimedia Private Limited (hereinafter referred to as "Devas Multimedia"). Devas et al. are companies with their seat in Mauritius. Antrix Corporation Limited (hereinafter referred to as "Antrix") is a commercial entity of the Indian Space Research Organisation, hereinafter referred to as "ISRO") and is engaged in the commercial exploitation of Indian satellites. Devas et al.'s investments in Devas Multimedia were approved by the Indian Foreign Investment Promotion Board.
2.6.
On 28 January 2005, Devas Multimedia concluded an agreement with Antrix in relation to the lease of 70 MHz capacity of the S-band for a twelve-year period with a renewal option (hereinafter referred to as the "Devas Contract"). For this, transponders would be placed on two satellites that had yet to be developed. Devas Multimedia planned to use the satellites and the associated spectrum, together with an ancillary network of transmission towers, to provide wireless audio-video broadcasts and broadband access to its customers throughout India (hereinafter referred to as "the Devas Services").
2.7.
In the period from 2005-2010, Devas Multimedia in collaboration with Antrix and ISRO, among others, was busy preparing these services. In that context, Devas Multimedia made payments of approximately USD 13 million to reserve capacity on the two satellites. These payments were funded by capital contributions from Devas et al. in Devas Multimedia of approximately USD 32 million. Added to that, Deutsche Telekom Asia (hereinafter referred to as "DT Asia") invested approximately USD 75 million in Devas Multimedia, for which it received a stake of 20% in Devas Multimedia.
2.8.
On 17 February 2011, the Cabinet Committee on Security, composed of the Prime Minister and the ministers of Defence, the Interior, Foreign Affairs and Finance of the Republic of India (hereinafter referred to as "CCS"), decided to annul the Devas Contract. The decision was based on the advice of various government bodies and committees. The press release of the same date regarding the decision taken by the CCS reads as follows:

CCS Decides to Annul Antrix-Devas Deal

Cabinet Committee on Security (CCS) has decided to annul the Antrix-Devas deal. Following is the statement made by the Law Minister (..) on the decision taken by the CCS which met in New Delhi today:

"Taking note cf the fact that Government policies with regard to allocation of spectrum have undergone a change in the last few years and there has been an increased demand for allocation of spectrum for national needs, including for the needs of defence, para-military forces, railways and other public utility services as well as for societal needs, and having regard to the needs of the country 's strategic requirements, the Government will not be able to provide orbit slot in S band to Antrix for commercial activities, including for those which are the subject matter of existing contractual obligations for S band.

In light of this policy of not providing orbit slot in S Band to Antrix for commercial activities, the [Devas Contract, added by this Court] shall be annulled forthwith."

2.9.
On 25 February 2011, Antrix formally notified Devas Multimedia of the annulment of the Devas Contract.
2.10.

On 3 July 2012, Devas et al. brought arbitration proceedings against India under Article 8 of the Treaty (hereinafter referred to as "the Arbitration"). The place of arbitration was The Hague.

2.11.

In a Partial Award of 25 July 2016 (hereinafter referred to as "the Partial Award"), the Tribunal ruled as follows:

"(i) Unanimously, that the Claimants' claims relate to an "investment" protected under the Treaty;"

(ii) Unanimously, that the notice of termination of the Devas Agreement sent by Antrix to Devas constituted an act of State attributable to the Responden

"(iii) By majority, that the Tribunal lacks jurisdiction over the Claimants' claims insofar as the Respondent's decision to annul the Devas Agreement was in part directed to the protection of the Respondent's essential security interests;"

"(iv) By majority, that the Respondent has expropriated the Claimants' investment insofar as the Respondent's decision to annul the Devas Agreement was in part motivated by considerations other than the protection of the Respondent's essential security interests;"

"(v) By majority, that the protection of essential security interests accounts for 60% of the Respondent's decision to annul the Devas Agreement, and that the compensation owed by the Respondent to the Claimants for the expropriation of their investment shall therefore be limited to 40%> of the value of that investment;"

"(vi) Unanimously, that the Respondent has breached its obligation to accord fair and equitable treatment to the Claimants between July 2, 2010 and February 17, 2011;"

"(vii) Unanimously, that the Claimants' other claims shall be dismissed;"

(viii) Unanimously, that any decision regarding the quantfication of compensation or damages, as well as any decision regarding the allocation of the costs cf arbitration, shall be reserved for a later stage of the proceedings."

The Arbitration was subsequently continued in respect of the quantification of compensation or damages.

2.12.
On 28 July 2016, the Partial Award was filed with the District Court of The Hague.
2.13.
On 11 August 2016, the Indian Central Bureau of Investigation (hereinafter referred to as "CBI") filed a charge sheet with the court, with a view to instituting criminal proceedings against former Indian officials who had approved the Devas Contract and against Devas Multimedia and some of its former and current directors. On 8 January 2019, a supplementary charge sheet was filed. (The charge sheet and the supplementary charge sheet are hereinafter jointly referred to as "the Charge Sheet".)
2.14.

On 13 October 2020, the Tribunal handed down its final award, estimating the value of Devas Multimedia on 17 February 2011 at USD 740 million, and ordered the Republic of India to pay damages to each of Devas et al., equalling 40% of USD 740 million multiplied by the percentage of the stake that each of Devas et al. had in Devas Multimedia.

3. Proceedings at first instance

3.1.

At first instance, the Republic of India claimed the setting aside of the Partial Award under Article 1065 of the Dutch Code of Civil Procedure ("DCCP") and an order for Devas et al. to pay the costs of the proceedings. Devas et al. raised a defence. In the judgment of 14 November 2018, the District Court denied the Republic of India's claim and ordered the latter to pay the costs of the proceedings. The most important findings of the judgment can be summed up as follows.

3.2.
At first instance, the Republic of India asserted that the Tribunal had wrongly assumed jurisdiction to hear Devas et al.'s claims (Article 1065(1)(a) DCCP), because Devas et al. had not made an 'investment' within the meaning of the Treaty, and because the decision to annul the Devas Contract was justified on the grounds of "essential security interests". In relation to the question of whether there had been an investment within the meaning of the Treaty, the Republic of India argued that Devas et al.'s activities consisted solely of "pre-investments", also in view of the fact that Devas Multimedia did not have a licence to offer telecommunication services from the Wireless Planning and Coordination Wing of the Indian Department of Telecommunications (hereinafter referred to as "the WPC Licence"). The District Court did not share this view. The District Court found that Devas Multimedia's right to a part of the S-band represented significant value. What is more, Devas Multimedia had paid USD 13 million in advance to reserve capacity on the satellites and the Indian authorities had given Devas et al. their approval to invest in Devas Multimedia. The District Court therefore found that there was an investment within the meaning of the Treaty, even without there being a WPC Licence.
3.3.
The Republic of India also asserted that the Tribunal had not complied with its mandate (Article 1065(1)(c) DCCP), had not (or not sufficiently) motivated its judgment (Article 1065(1)(d) DCCP) and/or had violated the Republic of India's right to be heard (Article 1065(1)(e) DCCP), by failing to discuss some essential assertions and defences of the Republic of India relating to the lack of 'investment', or else by failing to provide reasons (or sufficient reasons) for its rejection of them. The District Court likewise rejected that view. According to the District Court, the Tribunal did state reasons for its rulings on essential assertions by and defences of the Republic of India. The District Court found that Article 1065 DCCP does not allow it to review the merits of that reasoning.
3.4.
What is more, at first instance, the Republic of India argued that the Treaty did not permit the Tribunal to assume partial jurisdiction (Article 1065(1)(a) DCCP). The District Court rejected this submission, considering that the existence of "essential security interests" did not lead to the Tribunal lacking jurisdiction, but it could mean that Devas et al. would not be able to rely on the Treaty to oppose the annulment of the Devas Contract. Nor did the District Court share the Republic of India's view that the Tribunal had violated its mandate (Article 1065(1)(c) DCCP) by honouring the reliance on "essential security interests" for 60% of the S-band spectrum. According to the District Court, the Tribunal did not award more than had been claimed by ruling thus. The District Court likewise rejected the Republic of India's assertions that the Tribunal had not provided reasons (or insufficient reasons) for its decision to allow the reliance on "essential security interests" for 60% of the S-band spectrum (Article 1065(1)(d) DCCP), and thus wrongly confronted the parties with a surprise decision (Article 1065(1)(e) DCCP). According to the District Court, the Partial Award contains reasoning, the merits of which it cannot review and the Tribunal did not have to hear the parties on its intention not to honour the defence for the full 100% of the S-band spectrum.
3.5.
The Republic of India moreover based its claim to set aside the Partial Award at first instance on the Charge Sheet. It requested the District Court to stay the proceedings until an Indian criminal court had ruled on the Charge Sheet. The District Court denied this request because it was unclear when such a ruling was to be expected and a stay would therefore be contrary to the due process of law. The Republic of India moreover asserted that the Devas Contract was void due to the alleged criminal conduct and that there was no question of lawful 'investment' (Article 1065(1)(a) DCCP). According to the District Court, the Charge Sheet does not, however, have any legal effect as long as it has not resulted in an irrevocable criminal conviction and it therefore cannot assume that the Devas Contract was void on account of the alleged criminal conduct. Nor did the District Court share the Republic of India's view that the Partial Award was insufficiently reasoned because the Tribunal did not discuss the Republic of India's assertion that Devas Multimedia had wrongly given the impression that it had the requisite intellectual property rights when it signed the Devas Contract. This assertion only occurred in a footnote in the Republic of India's procedural documents in the Arbitration and cannot, therefore, be regarded as an essential defence that the Tribunal had to discuss, according to the District Court. Finally, the District Court dismissed the Republic of India's assertion that the Partial Award is contrary to public policy because the Tribunal had proceeded from the validity of the Devas Contract, even though criminal acts had been committed during its formation. That has not been established, according to the District Court, and the Republic of India had insufficiently substantiated the alleged criminal acts.

4. The claim on appeal

4.1.

On appeal, the Republic of India has asked this Court to set aside the District Court's judgment and award its claims at first instance with an order for Devas et al. to pay the costs of the proceedings, including subsequent costs plus statutory interest. To that end, the Republic of India filed nine grievances against the District Court's judgment, which briefly put are as follows:

4.2.
Grievances 1 and 2 take issue with the District Court's findings relating to whether there was an 'investment' within the scope of the Treaty. According to the Republic of India, the Tribunal and the District Court wrongly classified the Devas Contract, rather than the whole project of Devas Multimedia, as the subject of the Arbitration. Devas Multimedia's project could not be carried out without the requisite licences and because they had not been granted, there was no 'investment' within the meaning of the Treaty. What is more, the Republic of India asserts that the definition of the term 'investment' as used by the Tribunal and the District Court was far too broad and they made several errors in applying that term (Article 1065(1)(a) DCCP). The Republic of India moreover argues that the District Court failed to recognise that the Tribunal had violated its mandate and its obligation to provide reasons by failing to discuss or to provide reasons for the eight essential defences of the Republic of India relating to the term 'investment' (Article 1065(1)(c) and (d) DCCP).
4.3.
With grievances 3, 4 and 5, the Republic of India takes issue with the District Court's findings relating to the question of whether the annulment of the Devas Contract could be justified on the basis of "essential security interests". On appeal, the Republic of India no longer argues that the Tribunal did not have jurisdiction to rule on Devas et al.'s claims due to the existence of "essential security interests". It does, however, claim that the District Court has failed to appreciate that the Tribunal violated its mandate in more than one respect (Article 1065(1)(c) DCCP). The Tribunal should have examined whether the Republic of India's decision to annul the Devas Contract could be justified on the basis of "essential security interests" rather than considering to what extent the S-band spectrum would be used for "essential security interests". In doing so, the Tribunal failed to appreciate the dichotomous character of the exception for "essential security interests" and (incorrectly) fully reviewed the reliance on this exception. The Tribunal moreover applied a standard for its decision that had not been submitted by the parties, by determining ex aequo et bono which part of the S-band spectrum was meant for the protection of "essential security interests", supplementing the facts of its own volition. Added to that, the Republic of India contends that the District Court failed to appreciate that the Tribunal had not (or not sufficiently) reasoned its decision to honour the reliance on "essential security interests" for 60% of the S-band spectrum, and that this was an unacceptable surprise decision (Article 1065(1)(d) and (e) DCCP).
4.4.
Grievances 6 to 9 relate to the Charge Sheet and the Republic of India's assertion that Devas Multimedia had wrongly stated that it had the intellectual property rights. The Republic of India argues that the District Court had wrongly assumed that the Charge Sheet and the facts underpinning it cannot have legal consequences for the validity of the Devas Contract until an irrevocable criminal conviction has been handed down. According to the Republic of India, the Devas Contract is void as a result of the criminal acts that have been committed, and this means that there is no 'investment' within the meaning of the Treaty from which the Tribunal can derive its jurisdiction (Article 1065(1)(a) DCCP). What is more, according to the Republic of India, the Partial Award was not or not sufficiently reasoned, because the Tribunal did not discuss the alleged inaccuracy of Devas Multimedia's guarantees relating to the intellectual property rights (Article 1065(1)(d) DCCP). The District Court wrongly disregarded this ground for setting aside by considering that it was not an essential defence, given that the Republic of India had only relied on the inaccuracy of these guarantees in a footnote in the Arbitration. Finally, the Republic of India asserts that the Partial Award is contrary to public policy because the Tribunal had assumed that the Devas Contract was valid despite the criminal acts that had been committed (Article 1065(1)(e) DCCP). The Republic of India accuses the District Court of having disregarded these criminal acts by finding that it has not been established that directors and officers of Devas et al. had committed them. The Republic of India requests this Court to stay the proceedings in relation to the grounds for setting aside based on the Charge Sheet until an irrevocable decision has been handed down by the Indian court on the alleged criminal acts. According to the Republic of India, criminal proceedings should be initiated against the persons who have been charged by the end of 2019.
4.5.
Devas et al. raises a defence which will be discussed where relevant in what follows, and moves for the dismissal of the claims and a cost order against the Republic of India, including subsequent costs plus statutory interest.

5. Assessment

Preliminary Remarks

5.1.
Given that the Arbitration started before 1 January 2015, the provisions of the Fourth Book of the Dutch Code of Civil Procedure apply as they applied up to 1 January 2015. Any references in this judgment to the Dutch Code of Civil Procedure refer to these provisions.
5.2.
The place of arbitration was The Hague, which means that the District Court and, on appeal, the Court of Appeal have jurisdiction on the grounds of Article 1064 DCCP to hear the Republic of India's claim. Under Article 1073(1) DCCP, the provisions of Title 1 of the Fourth Book of the Dutch Code of Civil Procedure apply to the claim to set aside.
5.3.
Under Article 1065(1) DCCP, an arbitral award may be set aside, inter alia, on one of the following grounds:

"a. there is no valid arbitration agreement;"

b. (...)

"c. the tribunal did not adhere to its mandate;"

"d. the reasons for the arbitral award are lacking;"

e. the award, or the manner in which it was made, is contrary to public policy.

5.4.
Under Article 1057(4)(e) DCCP, a tribunal must provide the reasons for its decision. If no reasons are provided, an arbitral award may be set aside on the grounds of Article 1065(1)(d) DCCP. A situation where reasons have been given but in which a sound explanation for the relevant decision cannot be identified is equated to a lack of reasons.
5.5.

The starting point for the application of Article 1065 DCCP is that the regular court must apply restraint in using its authority to set aside an arbitral award. One of the reasons for this requisite restraint is that proceedings based on Article 1065 DCCP should not be used as a disguised appeal, due to the public interest in effective arbitral proceedings. This is different when it comes to answering whether a valid arbitration agreement was concluded (Article 1065(1)(a) DCCP) and whether the arbitral award is contrary to public policy (Article 1065(1)(e) DCCP), which is, inter alia, the case if the fundamental right to be heard was not properly observed during the formation of the arbitral award. When answering these questions, the court must conduct a full review of the arbitral award. This Court does not share Devas et al.'s view that a full review of the tribunal's jurisdiction is not an issue if a State invokes the tribunal's lack of jurisdiction. This view is based on the incorrect idea that a State cannot rely on the fundamental character of the right of access to justice. This right is equally fundamental for States. This fundamental character means that the Tribunal's jurisdiction must be reviewed in hill (cf. Dutch Supreme Court, 26 September 2014, ECLI:NL:HR:2014:2837).

5.6.
In what follows, this Court will first discuss the grievances relating to the term 'investment' in the Treaty (grievances 1 and 2), then the grievances relating to the protection of "essential security interests" (grievances 3, 4 and 5) and finally the grievances relating to the Charge Sheet and Devas et al.'s allegedly incorrect statements regarding intellectual property rights (grievances 6, 7, 8 and 9).

'Investment' within the meaning of the Treaty; jurisdiction of the Tribunal

5.7.
The Republic of India's grievances relating to the term 'investment' relate to the Tribunal's jurisdiction and the assessment of the defences that the Republic of India views as essential.
5.8.

This Court concurs with the District Court that the Tribunal assumed, on the right grounds, that there was an 'investment' within the meaning of the Treaty and therefore it had jurisdiction to assess Devas et al.'s claims. Devas et al. acquired shares in Devas Multimedia, an Indian company. This thus falls under the "shares, debentures and any other form of participation in a company" as referred to at (ii) of the definition of "investment" in Article 1 of the Treaty. Devas et al. bought these shares with capital contributions of approximately USD 32 million, for which the Indian Foreign Investment Promotion Board had given its approval. Accordingly, Devas et al.'s investments were made with due regard to the "relevant laws and regulations" of the Republic of India, as required at (a) of the definition of "investment". As shareholders in Devas Multimedia, Devas et al. were the indirect owners of a number of "assets" which can also be regarded as an "investment" within the meaning of the Treaty, such as the rights under the Devas Contract with Antrix. Under this contract, Devas Multimedia leased capacity on two satellites for a 12-year period, making advance payments of USD 13 million per satellite. Examples of "investments" included in the Treaty cover, inter alia, "claims to (...) any performance under contract having an economic value" and "business concessions conferred (...) under contract". Devas et al.'s investments represent (or represented) significant value, as evidenced by the fact that DT Asia paid approximately USD 75 million for a 20% stake in Devas Multimedia in March 2008. The Republic of India's argument that the Tribunal should not just have reviewed the Devas Contract but the Devas project is irrelevant in light of this. The annulment of the Devas Contract certainly had implications for the Devas project, but that does not detract from the character of the investments as established above. Its argument that this was only a pre-investment therefore fails. It was not a pre-investment given that Devas et al. had made actual investments within the meaning of the Treaty.

5.9.

The Republic of India argues that the Tribunal had used a definition of the term 'investment' that was far too broad. According to the Republic of India, aside from the definition of "investment" in the Treaty, five features of the autonomous concept of 'investment' that it derives from arbitral awards based on the ICSID Convention must also be satisfied: (i) a contribution in the host State in terms of resources (or financial resources), (ii) implementation of the activity concerned in the host State over a certain period of time, (iii) the assumption of risks by the investor, (iv) the expectation of profit or proceeds, and (v) if stated in the recitals of the treaty concerned, a contribution to the economic development of the host State. It can remain a moot point whether the Tribunal was obliged to apply this autonomous concept, because, as Devas et al. rightly argued, the five features mentioned by the Republic of India were satisfied by Devas et al.'s capital contributions and their use by Devas Multimedia: the capital contributions and the advance payments to reserve capacity on the satellites constitute a contribution in the host State, the lease of capacity on the satellite is for at least 12 years, risks are attached to the investments and the investments may yield considerable returns, given the amount that DT Asia was prepared to pay for a 20% stake in Devas Multimedia. It is acknowledged, in the Treaty's recitals, that investments may contribute to the economic development of the host State, but such contribution was not imposed as a requirement ("RECOGNISING that the promotion and protection of such investments will lend greater stimulation (...)'). It should in any event be assumed that investments of this scale in the telecommunications infrastructure may well contribute to the economic development of the Republic of India. This therefore satisfies the fifth feature. Although the way in which the District Court applied the Vienna Convention on the Law of Treaties is correct, the discussion that the Republic of India is keen to start on this, can remain undiscussed for this reason alone. For the record, this Court finds that India has raised insufficient well-founded arguments as to why the Tribunal should have applied a concept developed within the context of the ICSID Convention in deviation from the clear wording of Article 1 of the Treaty.

5.10.
Nor does this Court share the Republic of India's view that there was only an 'investment' within the meaning of the Treaty once all the licences required for the implementation of the Devas Services had been granted. There is no basis at all for such a requirement. Any uncertainty about the granting of a WPC licence, or other necessary operational and service licences, may at most mean that Devas et al.'s investment entailed certain risks. As the Tribunal rightly assumed, this may impact the value of the investment that the Republic of India might have to compensate, but it does not mean that there was never an investment. This might be different if the licences required for the Devas et al. project had been declined or it had been determined beforehand that the necessary licences could not be obtained. However, when the Republic of India annulled the Devas Contract, no necessary licences had been declined, and the Republic of India has made insufficient assertions to assume that such licences would have been declined. It merely submitted that obtaining a WPC licence would be an "extensive process" (Statement of Grievances, 214).
5.11.

The doctrine of the "general unity of an investment operation", on which the Republic of India relied in this context, does not alter that conclusion. That doctrine means that a transaction which, in itself does, not qualify as an 'investment' within the meaning of the applicable investment treaty, may nonetheless be regarded as such if it forms part of an operation that as a whole is classified as an investment (cf. the judgment in CSOB v Slovakia of 24 March 1999, which is cited as a landmark judgment in this field in the Schreuer and Kriebaum article, At What Time Must Legitimate Expectations Exist?, Liber Amicorum Thomas Wilde, p. 271 (Exhibit G-59 of Devas et al.)). The Tribunal found that Devas et al.'s capital contributions and the advance payments to reserve capacity on the satellites are, in themselves, to be regarded as 'investments' within the meaning of the Treaty. In that case, reliance on the doctrine of the "general unity of an investment operation" is not required to classify these investments as such. The Republic of India wrongly derives an argument from this doctrine that an investment is only an 'investment' within the meaning of the Treaty once the full investment operation has been completed and all the necessary licences to accomplish the goal of the investment have been obtained.

5.12.
The grievances relating to the Tribunal's jurisdiction must therefore fail.

Essential defences relating to the term 'investment'

5.13.

The Republic of India moreover claims that the Tribunal violated its mandate (Article 1065(1)(c) DCCP) and its obligation to provide reasons (Article 1065(1)(d) DCCP) by not engaging in a reasoned discussion of or by not making reasoned rulings on the eight essential defences of the Republic of India relating to the term 'investment' (subdivided into two groups of three and five essential defences). This Court must apply restraint in assessing the reliance on these grounds for setting aside. This Court may only set aside the Partial Award on one of these grounds if the Tribunal failed to rule on an essential defence or if a ruling by the Tribunal was devoid of any reasoning.

- First group of three essential defences

5.14.

According to the Republic of India, the Tribunal did not discuss its defence that only Devas et al.'s project as a whole, and not Deval et al.'s shareholding or assets such as the Devas Contract, qualified as an 'investment' within the meaning of the Treaty. The District Court rejected this submission with reference to paras. 199 to 210 of the Partial Award. This Court shares the District Court's view that the Tribunal did discuss this defence in those paragraphs. In paras. 199 to 210 of the Partial Award, the Tribunal considered that Devas et al.'s stake in Devas Multimedia and Devas et al.'s indirect ownership of the Devas Contract could be regarded as 'investments' within the meaning of the Treaty. In that context, the Tribunal found as follows: "(...) the Tribunal finds deficient the Respondent's argument that the Claimant's activities were "only pre-investment activities" because their investment was the alleged right to proceed with the Devas project pursuant to the Devas Agreement and because said project could not proceed without the WPC License, which Devas had no right to receive under the Devas Agreement". This finding was explained in the subsequent findings. In other words, the Tribunal did address this defence of the Republic of India. In setting aside proceedings, the Court may not review the Tribunal's assessment of the merits. The Court may simply review whether the Tribunal discussed an essential defence. And the Tribunal did do so here. The Tribunal's reasoning is not so incomprehensible that it can be said that all reasoning was lacking.

5.15.
The second essential defence that the Tribunal had allegedly failed to address related to the arbitral awards cited by the Republic of India. According to the Republic of India, the District Court misinterpreted its position. It claims that it was not about those decisions as such, but rather about the defence, backed up by that case law, that only the Devas project as a whole could qualify as an 'investment'. In that case, the Republic of India's objection addresses the discussion of the same essential defence as discussed earlier in para. 5.14 and this Court may, therefore, suffice by referring to that finding. For the rest, this Court concurs with the District Court's ruling that the Tribunal was not obliged to discuss the merits of the judgments cited by the Republic of India.
5.16.

The Tribunal had also allegedly paid insufficient attention to the Republic of India's defence that Devas Multimedia could not have rolled out satellite-only services without a WPC licence. According to the Republic of India, the Tribunal rejected this defence without providing any reasons. That is incorrect. The Tribunal found as follows: "[o]n the basis of the evidence received by the Tribunal, it is satisfied that, even without a WPC license, Devas could have rolled out satellite-only services" (para. 209 of the Partial Award). The Tribunal mentions the evidence submitted in the Arbitration in para. 181 of the Partial Award. In fact, the Tribunal also took note of the documents filed by the parties relating to this matter after the hearing (see paras. 46 to 54 of the Partial Award). As evidenced by the finding cited, the Tribunal based its decision in part on this evidence. The Court may not review the evaluation of the evidence by the Tribunal on the basis of Article 1065 DCCP. What is more, the question of whether Devas Multimedia could have rolled out satellite-only services without a licence was not decisive for the Tribunal's ruling that there was an 'investment' within the meaning of the Treaty.

- Second group of five essential defences

5.17.

According to the Republic of India, the Tribunal did not discuss its essential defence that Devas et al.'s shareholding and Devas Multimedia's indirect ownership of assets were not expropriated by the Republic of India and Devas et al. could not, therefore, rely on the Treaty in relation to these "assets". This objection is without merit. In para. 411 of the Partial Award, the Tribunal concluded that the property of Devas et al. had been expropriated within the meaning of Article 6(1) of the Treaty. The Tribunal thereby referred to its conclusion in para. 210 which is based on the findings in paras. 199 to 209. Evidently, the Tribunal found that the Republic of India's decision to annul the Devas Contract, as a result of which Devas Multimedia lost its rights to the spectrum on both satellites, could be equated with an expropriation of Devas et al.'s investments in Devas Multimedia. That finding, which discusses this defence, is not so incomprehensible as to amount to a lack of reasoning.

5.18.
The Republic of India moreover claims that the Tribunal did not discuss its essential defences that the Devas Contract as such did not constitute a qualifying 'investment' and that the scope of Devas et al.'s investments could not change the nature of that, with the Republic of India once more referring to the arbitral awards it had cited. This amounts to a reiteration of the Republic of India's assertions that were rejected earlier in paras. 5.14 and 5.15.
5.19.

The final two essential defences that the Tribunal did not discuss, according to the Republic of India, relate to the lack of the WPC Licence. The Republic of India accuses the Tribunal of not elaborating its ruling that the lack of a right to a WPC licence might be relevant to the value of the investment but not to the question of whether there was an investment. That accusation is unjustified because the Tribunal based this ruling on the finding that a WPC licence was not needed for satellite-only services and that the right to the spectrum as such represented a value, since this meant that the spectrum could not be used by others (see para. 209 of the Partial Award). Finally, the Republic of India accuses the Tribunal of not providing reasons for its ruling that Devas Multimedia could still roll out satellite-only services without a WPC licence. That accusation was discussed and rejected in para. 5.16 above.

5.20.
The foregoing means that the grievances relating to whether there was an 'investment' within the meaning of the Treaty (the Republic of India's grievances 1 and 2) must fail.

"Essential security interests"

5.21.

Article 11(3) of the Treaty provides that the Treaty cannot restrict a Contracting Party (in this case the Republic of India) in taking measures focused on the protection of its "essential security interests". In the Arbitration, the Republic of India did not rely on the Tribunal's lack of jurisdiction on the grounds of this article. Nor did the Tribunal interpret its reliance on this article as such in the findings of the Partial Award (cf. paras. 293 et seq. of the Partial Award). The Tribunal only found in the operative part of the Partial Award "(...) that the Tribunal lacks jurisdiction over the Claimants' claims inscfar as the Respondent's decision to annul the Devas agreement was in part directed to the protection of the Respondent's essential security interests." Unlike the District Court, this Court does not infer from this that the Tribunal had interpreted the Republic of India's submissions relating to the "essential security interests" as a jurisdictional defence. The fact is that the Partial Award's operative part must be interpreted in the light of the findings, and in those findings the Tribunal did not treat this as a jurisdictional defence. It is, at any rate, no longer in dispute between the parties on appeal that Article 11(3) of the Treaty does not relate to the Tribunal's jurisdiction but to an exception to the Treaty provisions for measures directed to the protection of "essential security interests".

5.22.
The Republic of India's grievances relating to the protection of "essential security interests" therefore do not relate to the Tribunal's jurisdiction. According to the Republic of India, the District Court failed to appreciate that, in its assessment of the reliance on this exception, the Tribunal did not adhere to its mandate (Article 1065(1)(c) DCCP), that the Tribunal failed to provide reasons for its ruling (Article 1065(1)(d) DCCP) and that the Tribunal's ruling was contrary to public policy (Article 1065(1)(e) DCCP). As found above, the court must apply restraint in setting aside an award based on the first two grounds. The court may only conduct a full review of the Tribunal's ruling if it is contrary to public policy.

- The Tribunal's Mandate

5.23.

According to the Republic of India, the Tribunal did not adhere to its mandate by applying the "essential security interests" provision to the S-band spectrum instead of to the decision to annul the Devas Contract. This Court does not share this view. After analysing the need to use the S-band spectrum for strategic/military objectives, the Tribunal considered as follows in para. 351 of the Partial Award: "But this is not the end of the matter. While the events related above provide helpful information concerning the administrative process followed both before and after the CCS decision, what is the determinant factor for the Tribunal is that decision itsef and whether it was directed to the protection of the Respondents essential security interests". This confirms that the Tribunal did take the decision to annul the Devas Contract as its starting point.

5.24.
The Republic of India moreover argues that the Tribunal failed to appreciate the dichotomous character of the "essential security interests" provision. With the dichotomous character of the provision, the Republic of India means that there are either "essential security interests" or there are not. This Court does not follow this argument either. It is established that different parts of the S-band spectrum can be used for different purposes. The District Court found that this possibility follows from the Devas Contract, in which Devas Multimedia and Antrix agreed that 90% of the spectrum could be used for civil/commercial purposes and the other 10% for strategic/military purposes (para. 4.50 of the District Court's judgment). The Republic of India did not contest this on appeal. The "essential security interests" provision may rule out the same part of the S-band spectrum being used both for the protection of "essential security interests" and for other purposes. To that extent this provision can be regarded as dichotomous. But the use of part of the S-band spectrum for the protection of "essential security interests" does not rule out the use of another part of the S-band spectrum for other purposes. Based on the file, the Tribunal was in any event entitled to draw that conclusion.
5.25.

According to the Republic of India, the Tribunal also exceeded the bounds of the legal dispute by conducting a full review of the reliance on "essential security interests" rather than applying the requisite restraint. This objection is without merit, given that the Tribunal did in fact apply the requisite restraint. This is, inter alia, evident from the following findings of the Tribunal:

""243. While, in the present case, the Respondent does not have to demonstrate necessity in the sense that the measure adopted was the only one it could resort to in the circumstances, it still has to establish that the measure related to its essential security interests; it cannot there fore be any security interest but it has to be an essential one (...)"

244. In performing this analysis, however, the Tribunal has also no difficulty in recognizing the "vide measure of deference" mentioned by the Respondent."

5.26.
The Republic of India claims that, in its assessment, the Tribunal did not apply the requisite restraint because it ended up deciding by itself that the entire S-band spectrum was not required for the protection of the Republic of India's "essential security interests". According to the Republic of India, this ruling is moreover based on an incorrect division of the burden of proof, with the Republic of India having to prove the validity of its reliance on "essential security interests".
5.27.
This objection is also without merit. The Tribunal based its ruling that the entire S-band spectrum was not required for the protection of "essential security interests" on the CCS decision. The Tribunal based this on the press release of 17 February 2011, in which this decision was communicated. In that press release, the decision to annul the Devas Contract was justified by referring to "increased demand for allocation of spectrum for national needs, including the needs cf defence, para-military forces, railways and other public utility services as well as for societal needs". Based on that press release, which the Tribunal had to proceed from given that it is the sole communication of the CCS decision, the Tribunal was able to determine that the decision to annul the Devas Contract was not based solely on the protection of "essential security interests".
5.28.

Within the context of the restrained review of the Partial Award based on Article 1065(1)(c) DCCP, there is no scope for a substantive assessment of the division of the burden of proof by the Tribunal. This Court also notes that the Tribunal's ruling that the Republic of India had to "establish" that the decision to annul the Devas Contract was related to "essential security interests" is understandable (cf. para. 242 of the Partial Award). The fact is that the Republic of India relied upon a provision in which an exception was made to the protection of investments under the Treaty. The Tribunal thereby took account of the Republic of India's "wide measure of defence" by imposing strict requirements on Devas et al.'s defence (cf. para. 245 of the Partial Award).

5.29.

The Republic of India also submits that, by fixing ex aequo et bono the part of the spectrum intended to protect "essential security interests" at a maximum of 60%, the Tribunal did not adhere to its mandate to decide according to the 'rules of law'. This objection lacks any basis in fact. Given the reasons for its decision, the Tribunal did rule according to the 'rules of law'. According to the paragraph in question (para. 373 of the Partial Award), the Tribunal did not base its determination of the part of the spectrum intended to protect "essential security interests" on an ex aequo et bono standard that differed from the one laid down by the Treaty. The mere fact that the Tribunal refers to a "reasonable allocation of spectrum" in this paragraph is insufficient in that regard. Reasonableness is, of course, likewise a factor in the assessment according to the 'rules of law'.

5.30.

Finally, this Court dismisses the Republic of India's argument that the Tribunal added to the facts by basing its decision that no more than 60% of the S-band spectrum is intended to protect "essential security interests" on the finding that"(...) All around the world, governments are faced every year with very large demands for funds for various prcjects from their military establishment and, just as regularly, governments grant only a percentage of such requests." (para. 370 of the Partial Award). This argument is based on an incorrect reading of the Partial Award. As the first sentence of para. 373 of the Partial Award states, the Tribunal based its decision that no more than 60% of the S-band spectrum is intended to protect "essential security interests" on the evidence submitted to it and the fact that the Republic of India had already reserved to itself 10% of the spectrum available in the Devas Contract ("[o]n the basis of the evidence submitted to it as described above and bearing in mind that the Respondent had already reserved to itsef 10% of the spectrum in question (...)". Consequently, the Tribunal's decision was not, or not exclusively, based on the finding cited by the Republic of India.

- Reasons

5.31.

According to the Republic of India, the Tribunal did not give reasons for its decision that no more than 60% of the S-band spectrum is intended to protect "essential security interests". That submission is incorrect. As held above, according to para. 373 of the Partial Award the Tribunal based the apportionment under the S-band spectrum on the evidence submitted to it and the fact that the Republic of India had already reserved to itself 10% of the spectrum available in the Devas Contract ("[o]n the basis of the evidence submitted to it as described above and bearing in mind that the Respondent had already reserved to itsef 10% of the spectrum in question (...)". On the basis of Article 1065(1)(c) DCCP, it is not up to this Court to decide whether that reason is correct in terms of its substance. The same goes for the additional lack of reasons argued by the Republic of India (Statement of Grievance, para. 457 et seq.). This Court need not comment on whether 100% of the S-band spectrum is now being used for military and paramilitary purposes. The fact is that this Court is merely required to review whether the arbitral award should be set aside, not to review the merits of the decision on the applicability of the essential security interests defence. The Republic of India's offer of evidence regarding the current use of the S-band spectrum is therefore irrelevant and it will be ignored.

- Surprise decision

5.32.
This Court shares with the District Court's view that the Tribunal's decision that no more than 60% of the S-band spectrum is intended to protect "essential security interests" cannot be regarded as a surprise decision. During the Arbitration, the Republic of India was given ample opportunity to substantiate its position that 100% of the S-band spectrum was needed to protect "essential security interests". It is incomprehensible why the Tribunal should have had to hear the Republic of India separately about its intention to grant less than the Republic of India's claim for 100% of the S-band spectrum for its "essential security interests". The Republic of India does not indicate what arguments it could have put forward against that intention which it was unable to put forward to justify its use of 100% of the S-band spectrum for the protection of "essential security interests". This could be different if the Tribunal should have taken account of the possibility that the use of different parts of the S-band spectrum for different purposes could lead to problems. But the Tribunal was not obliged to do so because the Devas Contract had already stipulated that 90% of the spectrum was to be used for civil/commercial purposes and the remaining 10% for strategic/military purposes.
5.33.
Given the foregoing, the grievances relating to the "essential security interests" clause (grievances 3, 4 and 5) will be rejected.

Charge sheet and deception with regard to intellectual property rights

5.34.
Referring to the Charge Sheet, the Republic of India's submits in its first ground for setting-aside that criminal acts played a role in the formation of the Devas Contract and that, consequently, no valid 'investment' was made and the Tribunal had no jurisdiction to hear Devas et al.'s claims (Article 1065(1)(c)). According to the Republic of India, the District Court should not have disregarded the facts set out in the Charge Sheet based on the finding that they had not yet led to an irrevocable criminal conviction.
5.35.
This Court finds, first and foremost, that neither part of the Charge Sheet (the charge sheet and the supplementary charge sheet) contains an official charge under Indian law. Charge sheets are filed with the court and it is only when it finds that the charges made in them are valid prima facie that they can be included in an official indictment. The charge sheets were filed with an Indian court some time ago (the charge sheet is dated 11 August 2016 and the supplementary charge sheet 8 January 2019). Devas et al.'s lawyers stated during the oral arguments on appeal that the court had in the meantime dismissed the request to hear the case. Devas et al. did not, however, submit a copy of the decision or any other document corroborating that statement. When asked, the Republic of India's lawyer was unable to confirm that a decision on the Charge Sheet had even been given.
5.36.
Even if the Charge Sheet is still pending, that still does not constitute grounds for assuming that the criminal acts played a role in the conclusion of the Devas Contract. It can remain a moot point whether an irrevocable court decision is needed for that, as the District Court assumed. Until the Indian courts have consented to the charges set out in the Charge Sheet being included in an official indictment, it cannot even be assumed that those charge are valid prima facie. Apart from its reliance on the Charge Sheet, the Republic of India merely gave a very general description of the alleged criminal acts (para. 505 of the Statement of Grievance). This means that the Republic of India's submission that criminal acts played a role in the formation of the Devas Contract is insufficiently substantiated.
5.37.
The Republic of India's Statement of Grievance also refers to an investigation into Devas Multimedia under the Prevention of Money Laundering Act 2002 and an investigation under the Foreign Exchange Management Act which led to fines being imposed on Devas Multimedia, its directors and officers and DT Asia. The Republic of India only referred to these investigations "for the sake of completeness" (para. 508 of the Statement of Grievance), but did not base its claim for setting aside on them. This Court will therefore disregard those investigations.
5.38.
The Republic of India also argues that the Partial Award should be set aside due to a lack of reasons because the Tribunal did not respond to its argument that, when the Devas Contract was formed, Devas Multimedia wrongly created the impression that it had certain intellectual property rights (Article 1065(1)(d) DCCP). The District Court dismissed the reliance on this ground for setting aside because this argument had only been included in a footnote to a document in the arbitral proceedings, meaning that the Tribunal did not need to treat it as an essential defence. The Republic of India countered with the argument that it had asked for documents relating to intellectual property in the "document production phase" of the arbitral proceedings and that the Tribunal had ordered Devas et al. to hand them over. Devas et al. did not do so, claiming that it did not have them. That cannot have prevented the Republic of India from elaborating on this argument, however, and providing substantiation of why it was important to its defence. The Republic of India did not do so. Devas et al. submitted, without challenge, that the Republic of India had only brought up this argument in the footnote in question and not in any other document in the arbitral proceedings, nor during the hearing nor during the examinations of various witnesses who appeared for Devas et al. Consequently, the Tribunal did not have to understand that this was an essential defence of the Republic of India that required an explicit decision from it in that regard. This Court therefore concurs with the District Court's decision on this ground for setting aside.
5.39.

Finally, the Republic of India submits that the Tribunal "condoned" Devas Multimedia's criminal acts in the Partial Award by classifying the Devas Contract as a valid and binding contract despite those acts. The Arbitral Award is therefore contrary to public policy and voidable pursuant to Article 1065(1)(e) DCCP, according to the Republic of India. This Court concurs with the District Court's decision that the reliance on this ground for setting aside fails because it has not been established in court that criminal acts played a role in the formation of the Devas Contract (para. 4.74 of the District Court judgment).

5.40.
This Court denies the Republic of India's request for these proceedings to be stayed pending the outcome of the criminal proceedings in India. In its Statement of Grievance, the Republic of India holds out the prospect of criminal proceedings being initiated against the persons referred to in the Charge Sheet at the end of 2019. However, there are still no criminal proceedings pending in India. The persons in question have not yet been officially indicted and it is uncertain to say the least whether they will be (see para. 5.35 above). Just like the District Court, this Court therefore finds that allowing this request would be contrary to due process.
5.41.
Having regard to the foregoing, grievances 6 to 9 will also be rejected.

Offer of evidence

5.42.
This Court will disregard the offer of evidence that the Republic of India formulates at the end of its Statement of Grievance. To the extent that that offer of evidence pertains to the Republic of India's submissions regarding the relevant licences, it follows from the foregoing findings that those submissions are not sufficiently substantiated nor are they determinative for the assessment of the claim in these setting aside proceedings. To the extent that the offer of evidence pertains to the current use of the GSAT-6 satellite, it is not relevant (see para. 5.31). To the extent that it pertains to the submission of documents, the Republic of India should have independently entered documents into the proceedings that it still wanted to rely on.

Conclusion and cost order

5.43.
Given that all the grievances fail, the District Court's judgment will be upheld. Accordingly, as the unsuccessful party the Republic of India will be ordered to pay the costs of the proceedings.

6. Decision

This Court:

"- upholds the District Court's judgment issued between the parties on 14 November 2018;"

- orders the Republic of India to pay the costs of the appeal proceedings, fixed on Devas et al.'s part at EUR 741 in court fees and EUR 3,342 in lawyer's fees, and EUR 163 in subsequent fees for its lawyer, to which EUR 85 will be added if this judgment has not been complied with amicably within fourteen days after being notified in writing and then being served, and determines that these amounts must be paid within 14 days after this judgment is pronounced or, as regards the amount of EUR 85, within 14 days after the date of service, failing which they will be subject to statutory interest, as referred to in Article 6:119 of the Dutch Civil Code, effective from the end of this period of 14 days.

- declares this judgment immediately enforceable as regards the cost order.

This judgment was issued by P. Glazener, J.J. van der Helm and D. Aarts and pronounced in open session on 16 February 2021 in the presence of the court clerk.

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