Executive Summary: Key Legal and Evidentiary Issues

• Scope of Québec Superior Court’s jurisdiction to recognize and enforce foreign investment treaty arbitration awards against a foreign state (Republic of India) despite state immunity objections
• Application of the State Immunity Act / Loi sur l’immunité des États, including commercial activity and waiver exceptions, and whether Airports Authority of India (AAI) shares or benefits from India’s immunity
• Effect of an appeal (regarding AAI’s immunity and the validity of the AAI seizure) on the continuation of first-instance recognition proceedings against India, and whether article 355 C.p.c. suspends only execution of a judgment or the whole instance
• Propriety of splitting (scinding) the proceedings so that recognition of the arbitral awards against India can move forward separately from issues relating to AAI’s alleged status as India’s inseparable organ and the validity of the AAI pre-judgment seizure
• Treatment of pre-judgment garnishment/saisie before judgment over assets held by IATA for AAI, and the risk of inconsistent or overlapping findings if heard together with recognition issues against India
• Quantification and structure of the arbitral tribunal’s monetary relief, including expropriation damages, costs and complex interest (LIBOR/SOFR-based), and the extent to which these awards can be given the same force and effect as a Québec judgment

Factual background and arbitral proceedings

The dispute arises out of an investment by Mauritian investor companies in Devas Multimedia Services (Devas) and the subsequent termination of the underlying satellite services agreement (the Devas Agreement) connected to India’s space and telecommunications sector. The claimants are CC/Devas (Mauritius) Ltd., Devas Employees Mauritius Private Limited and Telcom Devas Mauritius Limited, domiciled in Mauritius, later succeeded in the Québec proceedings by CCDM Holdings LLC, Devas Employees Fund US LLC and Telcom Devas LLC. Their case is that their equity interests in Devas constituted a protected “investment” under the applicable investment treaty between India and Mauritius and that India, as the respondent state, unlawfully expropriated that investment and failed to provide fair and equitable treatment. The arbitration was administered by the Permanent Court of Arbitration in The Hague (PCA Case No. 2013-09) before a three-member tribunal composed of the Hon. Marc Lalonde, P.C., O.C., Mr. David R. Haigh, Q.C., and the Hon. Shri Justice Anil Dev Singh, which rendered two key awards: an Award on Jurisdiction and Merits dated 25 July 2016 (the “Merits Award”) and an Award on Quantum dated 13 October 2020 (the “Quantum Award”).

Findings on jurisdiction, liability and treaty breaches

In the Merits Award, the arbitral tribunal unanimously held that the claimants’ interests qualified as a protected “investment” under the treaty and that the notice of termination of the Devas Agreement sent by Antrix to Devas constituted an act of State attributable to India. It concluded, by majority, that it lacked jurisdiction to the extent India’s decision to annul the Devas Agreement was directed to the protection of India’s essential security interests, but it also found, again by majority, that India had expropriated the claimants’ investment insofar as the annulment decision was motivated by considerations other than essential security interests. The tribunal allocated 60% of India’s decision to essential security interests and 40% to other motives, limiting compensation to 40% of the investment’s value. Unanimously, the tribunal further held that India breached its obligation to accord fair and equitable treatment to the claimants between 2 July 2010 and 17 February 2011, while dismissing the claimants’ remaining claims. Questions of quantum and allocation of arbitration costs and fees were expressly reserved for the later Quantum Award phase.

Quantum award, damages structure and financial relief

In the Quantum Award, the tribunal valued Devas at USD 740 million as of 17 February 2011 and applied the 40% compensation limitation derived from the Merits Award. It then calculated the compensation due to each shareholder according to its percentage interest: CC/Devas, holding 17.06% of Devas’ issued share capital, is awarded USD 50,497,600; Telcom Devas, also holding 17.06%, is awarded USD 50,497,600; and DEMPL, holding 3.48%, is awarded USD 10,300,800. These amounts total USD 111,296,000 in principal expropriation compensation across the three claimants. The tribunal further ordered India to pay pre-award interest on these principal compensation amounts at a rate of six-month USD LIBOR plus 2 percentage points, compounded semi-annually from 17 February 2011 until the date of full payment, with a mechanism to switch to SOFR plus 2 percentage points if LIBOR is discontinued. Costs and fees were also addressed: while tribunal and administrative costs were to be shared, the Quantum Award required India to pay the claimants an additional USD 10,000,000 under the UNCITRAL Rules, with post-award interest on that amount at six-month USD LIBOR plus 2 percentage points, compounded semi-annually from 13 October 2020 until full payment, again linking any future discontinuation of LIBOR to a SOFR-based rate. The tribunal prohibited India from withholding or offsetting any portion of the amounts awarded based on tax or other deductions, and ordered India to indemnify the claimants with respect to any Indian taxes, charges or set-offs imposed on the compensation. As a safeguard against double recovery, the claimants were required to undertake that they would not recover twice for the same loss, including in relation to any damages that might be paid by Antrix Corporation Limited to Devas Multimedia Private Limited under a separate ICC award.

Commencement of Québec enforcement proceedings and pre-judgment seizures

On 15 November 2021, the Devas investors commenced proceedings before the Québec Superior Court, Commercial Division, seeking recognition and enforcement in Québec of the Merits Award and Quantum Award, and to have them accorded the same force and effect as a judgment of the Superior Court. From the outset, the investors coupled their recognition application with aggressive pre-judgment enforcement measures. They obtained authorisations for multiple saisies before judgment by garnishment in the hands of the International Air Transport Association (IATA), targeting sums allegedly belonging to Airports Authority of India (AAI) and, initially, Air India as well. On 15 November 2021, Justice Granosik authorised a first seizure before judgment in the hands of IATA of funds belonging to AAI; a second seizure order of further AAI funds held by IATA followed on 24 November 2021; and, on 21 December 2021, a further seizure was authorised for funds belonging to Air India held by IATA. The Air India-related seizure was eventually annulled on appeal and is no longer in issue, but the AAI seizure (“Saisie AAI”) remained a central enforcement lever for the investors and a focal point of the immunity objections raised by both India and AAI.

State immunity objections and the India immunity judgment

India reacted by invoking state immunity under Canada’s State Immunity Act / Loi sur l’immunité des États (LIÉ). On 16 March 2022, it filed a de bene esse application seeking to have the recognition proceedings dismissed or declared inadmissible on the basis that it enjoyed a strong presumption of immunity pursuant to sections 3 and 6 of the LIÉ. In a judgment dated 23 December 2022 (the “Judgment on Immunity”), the Québec Superior Court rejected India’s immunity application, holding that India did not benefit from immunity under the LIÉ because the commercial activity exception and the waiver exception applied in the circumstances. That judgment was later upheld by the Court of Appeal in December 2024, which concluded that none of India’s grounds of appeal could bar the recognition application from proceeding on the merits. As a result, India is not shielded from the jurisdiction of the Québec Superior Court in relation to the investors’ recognition and enforcement action.

Treatment of AAI and its own immunity claim

Parallel to India’s objections, AAI sought to remove itself from the Québec proceedings. It moved for the dismissal of the recognition application and of the then-pending Saisie AAI as against it, contending that it enjoyed state immunity under the LIÉ as an organ or separate entity of India. In a judgment of 29 August 2024 (the “AAI Judgment”), the Superior Court accepted AAI’s position, held that AAI benefited from state immunity in the circumstances, and dismissed the recognition application and AAI-related seizure proceedings as against AAI. The investors appealed that ruling; their appeal (the “AAI Appeal”) was scheduled to be heard by the Court of Appeal in March 2026. In their appellate pleadings, the investors argue that AAI is an inseparable organ of the Republic of India and that, as such, it shares India’s status and should not be treated as immune in light of the earlier Judgment on Immunity, which removed India’s immunity defences. They seek a declaration that AAI is an inseparable organ of a foreign state under the State Immunity Act, so that, in effect, it is the Republic of India for the purposes of these proceedings.

Procedural impasse: stay of proceedings versus scission

While the AAI Appeal was pending, the Supreme Court of Canada rejected India’s application for leave to appeal the Court of Appeal’s December 2024 decision on India’s immunity. Following that refusal, and in line with an agreement between the parties, a previous suspension of the Québec recognition proceedings expired in September 2025, and the investors indicated that they wished to proceed on the merits of their recognition application against India alone. India opposed moving forward, contending that the recognition case could not sensibly be tried on the merits while the AAI Appeal, touching on AAI’s status and immunity and the validity of the Saisie AAI, remained unresolved. India argued that the investors’ appeal against the AAI Judgment had automatically stayed not only the execution of that judgment but also the entire recognition proceeding, relying on article 355 of the Code of Civil Procedure (C.p.c.). It further maintained that proceeding without AAI would risk inconsistent judgments on AAI’s status, its immunity and the validity of the AAI seizure, leading to unnecessary, costly, and potentially unfair litigation. In response, the investors filed a de bene esse application to split the proceedings, asking the Superior Court to sever the conclusions dealing with recognition and enforcement of the awards against India (conclusions B, C, D and E of their originating application) from those dealing with AAI’s status as India or its alter ego and the validity of the Saisie AAI (conclusions E.1 and F). Their proposal was to move ahead in a first phase solely on the recognition and enforcement issues against India, leaving AAI-related questions for a second phase, to be heard only if and when necessary after the AAI Appeal was determined.

Interpretation of article 355 C.p.c. and the availability of a stay

The Superior Court rejected India’s contention that article 355 C.p.c. automatically stayed the entire recognition proceeding in first instance simply because the AAI Judgment had been appealed. The Court held that the text of article 355 is clear: a regularly formed appeal suspends the execution of the judgment under appeal, except in specific situations, but it does not automatically suspend the continuation of the underlying first-instance proceedings. Nothing in the Code of Civil Procedure provides that an appeal by one party halts all aspects of the ongoing instance involving other parties and other issues. The Court also noted that India’s own previous conduct contradicted its new position: earlier, the Superior Court had heard and decided India’s dismissal application and AAI’s declaratory application while an appeal in the same overall matter was already pending before the Court of Appeal, and later heard and decided AAI’s dismissal motion while three related appeals were under deliberation. If an appeal automatically stayed the entire instance, such first-instance steps would have been improper, yet India had proceeded without raising the stay argument. The Court further recalled that a previous suspension of the recognition proceedings had in fact been achieved only by explicit agreement between India and the investors during the pendency of India’s leave application to the Supreme Court of Canada, underscoring that a stay was not automatic but discretionary or consensual. Finally, the Court observed that the power to stay proceedings, particularly in the context of arbitral award recognition under articles 645 and 654 C.p.c., is exceptional and must be exercised sparingly; those provisions strictly circumscribe when and how a court may defer or suspend recognition and enforcement.

Rationale for splitting the proceedings

Turning to the investors’ request to split the proceedings, the Court concluded there was no serious impediment to severing the AAI-related conclusions (E.1 and F) from the core recognition and enforcement claims against India (B, C, D and E). It emphasised that the recognition of the Merits Award and the Quantum Award and their assimilation to Québec judgments could proceed entirely independently from the question whether AAI is India’s alter ego and from the validity of the Saisie AAI. In the structure proposed by the investors, the first-phase hearing would address only the recognition of the awards against India; they did not seek, at that stage, to litigate AAI’s status or the AAI seizure. The Court noted that neither India nor AAI had argued, in earlier stages of the case, that AAI played any role in the events leading to the arbitral awards or in the issues captured by conclusions B, C, D and E; AAI’s involvement pertained instead to enforcement against its assets via IATA and to its claimed immunity. The Court considered that any risk of inconsistent findings was remote. If the Court of Appeal were to uphold the AAI Judgment, there would simply be no second-phase trial on AAI-related questions. If, instead, the AAI Judgment were overturned and the Court of Appeal issued a declaration concerning AAI’s status as an inseparable organ of India, that appellate ruling would likely narrow and clarify the scope of any subsequent second-phase proceedings on conclusions E.1 and F. In either scenario, allowing the first-phase recognition case against India to move forward would not prejudice India’s defence and would serve the broader interest of justice by preventing further delay in a matter already pending for nearly five years.

Outcome of the Superior Court decision and financial implications

In its 11 March 2026 judgment, the Québec Superior Court dismissed India’s Application to Stay the Proceedings, refused to declare that the recognition proceedings were stayed pending final disposition of the AAI Appeal, and instead granted the investors’ de bene esse Application to Split the Proceedings. It ordered that the recognition-related conclusions (B, C, D and E) be heard and determined in a first phase, with AAI-related conclusions (E.1 and F) reserved for a possible second phase if needed after the AAI Appeal. The Court further directed India to communicate its defences on conclusions B, C, D and E by a specified date and required the parties to file a timetable for the first-phase proceedings, awarding costs to the investors. Substantively, the arbitral tribunal’s Quantum Award, which the investors seek to have recognised and given the same force and effect as a Québec judgment, grants a total principal compensation of USD 111,296,000 across the three investor entities, plus a further USD 10,000,000 in costs, for a principal total of USD 121,296,000, together with substantial pre- and post-award interest (calculated by reference to LIBOR or SOFR plus a spread, compounded semi-annually) and an open-ended indemnity for any Indian taxes, charges or set-offs, the latter figures not being precisely quantifiable from the judgment. In this Québec decision, the successful parties are the Devas investors (including their successor entities), who prevail on the key procedural issues of stay and scission and obtain an order compelling India to advance its defence, while India’s attempt to halt the proceedings fails and the total monetary relief flowing from the arbitral awards in favour of the investors stands at least at USD 121,296,000 in principal (comprising USD 111,296,000 in compensation and USD 10,000,000 in costs), which corresponds, on an illustrative and non-binding assumption of 1 USD ≈ 1.35 CAD, to approximately CAD 163,749,600 in principal, with the ultimate overall recovery further augmented by variable pre- and post-award interest and an unquantified tax indemnity, such that the precise final total for costs, monetary award and damages cannot be definitively determined from this judgment alone.