UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

August Term, 2022

Argued: February 23, 2023 Decided: June 22, 2023

Docket No. 21-3013-cv

HUGHES COMMUNICATIONS INDIA PRIVATE LIMITED,

Plaintiff-Appellant,

— v. —

THE DIRECTV GROUP, INC.,

Defendant-Appellee.

Before:

CALABRESI, LYNCH, and ROBINSON, Circuit Judges. Plaintiff-Appellant Hughes Communications India Private Limited (“Hughes India”) appeals from a judgment of the United States District Court for the Southern District of New York (Hellerstein, J.) dismissing its indemnification claims against The DirecTV Group, Inc. (“DirecTV”). The case arises out of an asset purchase agreement in which DirecTV spun off fourteen subsidiaries, including Hughes India (the “Agreement”). The Agreement requires DirecTV to indemnify Hughes India for certain contractually defined “Taxes” that accrued before the closing of the spin-off transaction and “Proceedings” that were initiated prior to the closing date. Hughes India sought a declaration that DirecTV must indemnify it for unpaid license fees, interest, and penalties imposed by India’s Department of Telecommunications (the “DOT”). The district court granted summary judgment for DirecTV, concluding that the license fees were not subject to indemnification because they were neither Taxes nor the result of Proceedings against Hughes India as defined by the Agreement. Hughes India appeals. We agree with Hughes India that under the plain terms of the Agreement, the license fees are Taxes and the Provisional License Fee Assessment (the “Provisional Assessment”) issued by the DOT initiated a Proceeding against Hughes India. We conclude that DirecTV is obligated to indemnify Hughes India for license fees, interest, and penalties accrued for tax periods ending on or before closing, and for those amounts related to the Provisional Assessment issued for fiscal years 2001 to 2003, which was the only Proceeding initiated before closing. Accordingly, we VACATE the district court’s judgment and REMAND the case to the district court for further proceedings consistent with this opinion.

KANNON K. SHANMUGAM (William T. Marks, H. Christopher Boehning, Jonathan Hurwitz, on the brief), Paul, Weiss, Rifkind, Wharton & Garrison LLP, Washington, DC, for Plaintiff-Appellant.

NICOLE A. SAHARSKY (Matthew D. Ingber, Niketa K. Patel, Alina Artunian, Avi M. Kupfer, on the brief), Mayer Brown LLP, Washington, DC, for Defendant-Appellee.

2 GERARD E. LYNCH, Circuit Judge:

Plaintiff-Appellant Hughes Communications India Private Limited (“Hughes India”) appeals from a judgment of the United States District Court for the Southern District of New York (Alvin K. Hellerstein, J.) granting summary judgment in favor of The DirecTV Group, Inc. (“DirecTV”) on Hughes India’s indemnification claims. This dispute stems from an asset purchase agreement (the “Agreement”) between the parties whereby DirecTV spun off fourteen of its subsidiaries, including Hughes India. The Agreement requires DirecTV to indemnify Hughes India for certain contractually defined“Taxes” accrued on or before the closing of the transaction and “Proceedings” initiated before the closing.

Prior to the closing, India’s Department of Telecommunications (the “DOT”) issued Hughes India a Provisional License Fee Assessment (the “Provisional Assessment”), asserting that Hughes India had underpaid its license fees