New Delhi, July 27: The cost of one element of the scam-a-day atmosphere of 2011, blamed for making the Manmohan Singh government lose its nerve and take knee-jerk decisions that accelerated the rise of Narendra Modi, has been pronounced.

An international tribunal has indicted the Indian government for reneging on its commitments to foreign investors by cancelling five years ago an agreement that India's space agency had signed with a private company that planned to offer satellite-based mobile services.

The Permanent Court of Arbitration (PCA) in The Hague, a tribunal that examines disputes between member states and private parties, has held that the Indian government's action of cancelling the contract between Devas Multimedia and Antrix, the space agency's commercial arm, was unfair.

The tribunal observed on Monday that by annulling the contract, the Indian government had expropriated the investments of Devas's foreign shareholders and acted unfairly and inequitably, thus making it liable to pay financial compensation. The tribunal is expected to determine the quantum of the compensation later this year, Devas officials said.

India's space department yesterday iterated that the government had invoked the "essential security interests through a well-reasoned, valid, and proper decision", and claimed the PCA tribunal had said the government's "essential security provisions... do apply in this case to an extent."

"The award of the tribunal is being examined and legal recourse, as deemed fit, will be taken," Isro said in its statement. "We remain committed to pursue our larger national interests, including sovereign strategic security interests in this matter."

Vishwanathan said Devas had sought and obtained relief from Karnataka High Court against the enforcement directorate actions. "We believe these are reactionary moves - we've been subject to such inquiries, and there have been no adverse findings to date."

Under the January 2005 pact, Antrix was to launch and operate two satellites built by the Indian Space Research Organisation (Isro) and lease associated S-band satellite spectrum to Devas for 12 years. Devas had planned to offer customers across India audio-video and broadband wireless access services through an innovative hybrid satellite and terrestrial system.

But Isro pulled out of the deal in February 2011 when the UPA was in power, citing national interest. In January 2012, the Centre named four former space officials for their role in the deal and asked two to quit post-retirement positions after two probe panels suggested the pact favoured Devas and exposed the government to financial risk.

The circumstances and manner through which Antrix engaged with Devas ahead of the abrupt cancellation of their pact had led sections of scientists to suspect that the Manmohan government, then reeling under the telecom scam, had panicked amid concerns that the pact favoured Devas.

Senior scientists formerly associated with India's space programme and Devas officials have in the past said they were puzzled by what appeared to them as the abrupt cancellation of the agreement.

Scientists have pointed out differences in the reports of two probe panels. One report seemed to suggest that the decision to pursue the Antrix-Devas deal was a serious error of judgement to usher in what a decade back would be hard-to-get technology into India. The other report appeared to assume malintent without providing any evidence for it.

Roddam Narasimha, an aerospace scientist who was a member of one of the panels, quit his position as member of the space commission after the government named four scientists involved in the deal.

"We had found no evidence that any of the scientists named had made personal gains," Narasimha told The Telegraph yesterday. "They were known to be persons of great integrity and had dedicated their lives to Isro. If there was indeed wrongdoing, action should, of course, be taken. To the best of my knowledge, there has been no indictment of any of the four scientists until today."

Isro said the CBI had filed a first information report against Devas and "unknown public servants" and the Enforcement Directorate had issued a showcause notice to Devas for alleged violation of foreign exchange rules.

Monday's ruling follows independent complaints filed by Devas and its foreign shareholders in various international arbitration tribunals.

In September 2015, an International Chamber of Commerce tribunal had found Antrix's cancellation of the contract as unlawful and awarded Devas damages of $672 million, plus a post-award annual interest accruing at 18 per cent until the award is paid in full. The penalty amount is about 60 per cent of the space department's 2016-17 budget of Rs 7,509 crore.

Devas, a company headquartered in Bangalore and led by a team of satellite and telecommunications specialists, hinted today it was ready to sort things out with Antrix.

"The decisions by the two independent arbitration panels vindicate us," Ramachandran Viswanathan, president and chief executive officer of Devas, said. "The company and shareholders wish to find a way to resolve this. We're hopeful of a collaborative, constructive engagement with the government to resolve this," he said.