Cairn claims order to attach 20 India properties in Paris

Government of India denies knowledge

Updated - July 08, 2021 08:26 pm IST

Published - July 08, 2021 10:44 am IST - New Delhi

A Cairn India employee works at a storage facility for crude oil at Mangala Oil field in Rajasthan. File

A Cairn India employee works at a storage facility for crude oil at Mangala Oil field in Rajasthan. File

The Cairn Energy dispute with India over the settlement of a $1.2 billion award from The Hague, took a dramatic turn on Thursday, with the company saying it had secured a French court order allowing it to freeze at least 20 Indian properties in Central Paris.

The Government of India, however, denied all knowledge of the latest order. It said it had filed an appeal against the tribunal decision of the Permanant Court at The Hague delivered in December 2020.

“Government is trying to ascertain the facts, and whenever such an order is received, appropriate legal remedies will be taken, in consultation with its Counsels, to protect the interests of India,” a Finance Ministry statement said, stressing that no notice, order or communication had been received by the government from any French court.

Earlier, a Cairn Energy spokesperson told The Hindu that the ball was in India’s court to stop the enforcement proceedings of assets.

‘For amicable settlement’

“Our strong preference remains an agreed, amicable settlement with the Government of India to draw this matter to a close, and to that end we have submitted a detailed series of proposals to them since February this year,” the spokesperson said.

“However, in the absence of such a settlement, Cairn must take all necessary legal actions to protect the interests of its international shareholders,” the spokesperson added in a statement.

According to sources, the award by the Tribunal judiciaire de Paris was the “necessary preparatory step” to taking ownership of the properties and ensuring all proceeds from the sale of the properties would be accrued to Cairn Energy PLC as part of its efforts to enforce the award from The Hague in Cairns’ favour.

While the Paris properties are estimated to yield about $23 million, Cairn sources had told The Hindu that they have identified assets worth about $70 billion in several jurisdictions that they could potentially attach through court orders.

Cairn lawyers have registered The Hague award in courts in at least 10 jurisdictions including the U.S., the U.K., Netherlands, Canada , France, Singapore, Japan, the UAE and even the Cayman Islands.

In New York court

In June, Cairn lawyers approached the court in the Southern District of New York, making the plea that Air India should be made liable for the outstanding settlement, and stating that other state-owned corporations could be targeted as well.

Last month, some foreign investors in Devas Multimedia filed a similar plea in the same court, seeking to declare Air India as the Indian government’s “alter ego” and recover a $160 million compensation awarded to the firm after an international arbitration over its scrapped deal with ISRO’s commercial arm, Antrix Corporation.

The government has until next week to file its challenge to the Cairn Energy plea in the New York court. Even as the tax dispute has snowballed into a tussle in international courts, both the Indian government and Cairn Energy said they were open to continuing talks over the issue.

“Government has already filed an application on March 22, 2021 to set aside the December 2020 international arbitral award in The Hague Court of Appeal. Government of India will vigorously defend its case in Set Aside proceedings at The Hague,” the Finance Ministry asserted on Thursday.

In December, the three-member tribunal in the Permanent Court of Arbitration at The Hague ruled unanimously against the retrospective tax levied by India on Cairn in 2015. It ruled that the tax fell afoul of the bilateral investment pact between India and the U.K.

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