Air India Seeks to End $1.2 Billion U.S. Case Citing New Owner
Air India is arguing that a recent change in ownership of the carrier prevents demands over recovery of arbitration awards.
(Bloomberg) -- Air India Ltd. is seeking to end a case filed by Devas Multimedia Pvt. in a U.S. court, arguing a recent change in ownership of the carrier prevents demands over recovery of arbitration awards.
Devas demands $1.2 billion from the Indian government after winning three international arbitration awards over a scrapped telecommunications deal with a state-run firm. The company is seeking to seize overseas assets of the formerly government-owned flag carrier, which was handed over to Indian conglomerate Tata Sons Pvt. on Thursday, saying the national carrier is an alter ego of the Indian government.
Air India’s filing in a U.S. court came on Thursday, the same day a new management took over, ending years of taxpayer-funded bailouts for the airline, and helping Prime Minister Narendra Modi successfully execute the first major privatization in nearly two decades. Finance Minister Nirmala Sitharaman said last week the nation will begin the process for winding up Devas.
The district court in New York can dismiss and dispose of Devas’ case entirely based on Air India’s request, or it can identify remaining issues in the case if the demand is denied, according to a filing by the airline.
Representatives of Devas and Air India did not immediately respond to emails seeking comments.
In an interview before Air India’s latest filing, Devas’ lawyers said they will continue their efforts to recover the arbitration award money from assets of Indian government in several countries. Matthew McGill, counsel for shareholders of Devas, said the company will initiate a new arbitration against the Indian government.
©2022 Bloomberg L.P.