- Thursday, April 25, 2024
By: Shilpa Sharma
AFTER Air India, Cairn Energy PLC plans to target other overseas assets of state-owned firms and banks to recover the amount due from the Indian government.
Last month, the British company filed a lawsuit in a US court, demanding the airline to pay a $1.26 billion (£905 million) arbitration award.
The airline is controlled by the Indian government so much that they are “alter egos”, the company argued in the US court.
The company 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.
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.
Cairn Energy now aims to bring lawsuits in several countries to make state-owned firms liable to pay the $1.2bn (£864m) plus interest and penalties that are due from the Indian government.
“There are a number of state enterprises which we are considering for enforcement action. Enforcement action will be soon and it may not be in the US,” said Dennis Hranitzky, head of the sovereign litigation practice at Quinn Emanuel Urquhart & Sullivan, a law firm representing the company.
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.
Meanwhile, Air India has time till mid-July to respond to the lawsuit filed by British firm in the US.
