AIR INDIA has time till mid-July to respond to the lawsuit filed by Britain's Cairn Energy PLC in a US court, demanding the airline to pay a $1.26 billion (£905 million) arbitration award.
Cairn Energy had won the arbitration against the Indian government last year.
In December, a three-member international arbitration tribunal overturned levy of retrospective taxes on Cairn and ordered India to refund shares sold, dividend confiscated and tax refunds withheld to recover such taxes.
The tribunal consisted of one judge appointed by India.
In the lawsuit, Cairn urged the US court to hold Air India liable for the arbitration award.
The airline is controlled by the Indian government so much that they are "alter egos", Cairn argued in the US court.
Despite participating in the arbitration proceeding for over four years, the Indian government has not accepted the award and filed a 'setting aside' petition in a court in The Netherlands - the seat of the arbitration.
With Cairn seeking to recover the award from state-owned entities such as Air India, the government has stated it will contest any enforcement.
Cairn has identified $70bn (£50bn) of Indian assets overseas for potential seizure to collect award, which now totals to $1.72bn (£1.2bn) after adding interest and penalty.
The identified assets range from Air India's planes to vessels belonging to the Shipping Corporation of India, and properties owned by state banks to oil and gas cargoes of public sector undertakings.
Cairn plans to move courts in the US and Singapore for seizure of the assets in absence of Indian government's refusal to honour an international arbitration award.
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