Court of Appeal win for Air India: Woods successfully challenged the enforcement of an US$111M arbitral award
Woods successfully represented Air India against recognition and enforcement proceedings related to an approximately US$111M arbitral award rendered against the Republic of India pursuant to a bilateral investment treaty between the latter and Devas. On September 20th, 2022, the Court of Appeal of Quebec granted our client Air India’s appeal and quashed the seizure before judgment of US$17M of its funds held by the International Air Transport Association, a Montreal-based trade association of the world’s airline.
This decision comes after an international arbitration tribunal in 2020 awarded Devas approx. US$111M in damages against the Republic of India for the termination of a telecom deal. Devas has pursued legal actions in various foreign jurisdictions, including Canada, Switzerland and the United States following this award in order to seize assets and obtain compensation. Devas is also seeking in the United States, South District of New York, and in Quebec,to seize assets of the formerly state-owned flag carrier Air India and of the Airport Authority of India. In December 2021, the Superior Court of Quebec granted Devas shareholders the right to seize before judgment Air India funds deposited with IATA, the global air transport association headquartered in Montreal. In January 2022, we intervened on behalf of Air India to quash the seizure of Air India’s assets on the basis of sufficiency of allegations. Following our motion, the Superior Court of Quebec provided relief to Air India by modifying the initial seizure order and reducing the seizure amounts to 50% of IATA's funds pertaining to Air India. Since these proceedings took place concurrently with Air India’s privatization and shareholder change occurred on January 27,2022, we notified a motion to review the seizure and on February 23,2022, the Superior Court of Quebec suspended the effects of the seizure on a going-forward basis. In parallel, Air India had been granted leave to appeal the sufficiency judgment and appeared before the Court of Appeal on May 13, 2022, on the merits of the appeal.
In its September 20, 2022, the Court of Appeal granted the appeal and quashed entirely the seizure before judgment against Air India.In the judgment, the Court of Appeal states that in the absence of allegations that Air India was created or used for dissembling fraud, an abuse of rights or a violation of a rule of public order, the Superior Court could not authorize Devas shareholders to pierce the corporate veil and seize Air India’s assets to satisfy India's debt.