- Cairn Energy wants to recover some of the $ 1.7 billion from the seizure
- French justice asked him to take over Indian assets in June
- Cairn moved to several jurisdictions overseas to collect the amount
In a setback in India, Britain’s Cairn Energy obtained an order from the French court to seize some 20 government properties in Paris to recover part of the $ 1.7 billion owed to New Delhi following a panel arbitration canceling the levy of retroactive taxes.
The centrally located properties include mostly apartments, valued at more than 20 million euros, which have been used by Indian government establishments in France, three people with direct knowledge of the matter told the Press Trust of news agency. India.
The French court, the Paris Judicial Tribunal, on June 11 accepted Cairn’s request to freeze (through judicial mortgages) residential real estate held by the Indian government in central Paris, they said, adding that the legal formalities had been completed Wednesday evening. .
While Cairn is unlikely to evict Indian officials residing in these properties, the government cannot sell them after the court order.
A three-member international arbitration tribunal composed of a judge appointed by India had, in December last year, unanimously overturned the tax levy on Cairn and ordered the repayment of the shares sold, the forfeiture of dividends and tax refunds withheld to collect this claim.
With the Indian government refusing to honor the award, Cairn traveled to several foreign jurisdictions to enforce the award by seizing Indian assets.
Last month, Cairn filed a lawsuit in the US District Court for the Southern District of New York, arguing that Air India is so controlled by the Indian government that it is an “alter ego” and that the airline should be held responsible for the arbitration award.
Similar lawsuits are likely to be brought in other countries, mainly with high value assets. The arbitration award has been registered in countries such as the United States, United Kingdom, Canada, Singapore, Mauritius, France and the Netherlands.
Cairn has identified $ 70 billion in Indian assets abroad for potential foreclosure to collect compensation, which now stands at $ 1.72 billion after including interest and penalties.
While the Ministry of Finance did not immediately comment on the matter, a spokesperson for Cairn said: âOur strong preference remains a friendly settlement with the Indian government to bring this matter to an end, and to this end, we have submitted a detailed report series of proposals addressed to them since February of this year. “
“However, in the absence of such a settlement, Cairn must take all necessary legal steps to protect the interests of its international shareholders,” the spokesperson said without giving further details.
Sources said the French court order affects around 20 centrally located properties owned by the Indian government as part of a debt guarantee to Cairn.
âThis is the preparatory step necessary for taking possession of the properties and ensures that the proceeds of any sale would be owed to Cairn,â one of the people said.
Last month, Cairn filed a petition in the courts of the Southern District of New York, seeking judicial confirmation that Air India, the national carrier, can be considered the alter ego of the Indian state and therefore jointly responsible for the arbitration award.
Air India has time until mid-July to file a plea challenging the Cairn trial, sources said.
The Indian government, which participated in the arbitration process for four years, did not accept the award and filed a request for annulment in a court in the Netherlands, the seat of the arbitration.
Cairn’s decision is similar to that of a British Virgin Islands court that ordered in December last year that hotels in New York and Paris owned by Pakistan International Airlines be used to settle a claim against the Pakistani government by a Canadian-Chilean copper company. .
Crystallex International Corp had filed a similar lawsuit to seize the property of Petroleos de Venezuela, SA (PDVSA), Venezuela’s state oil company, in Delaware a few years ago after the Latin American country n failed to pay the company $ 1.2 billion that an arbitral tribunal had ordered to pay in lieu of the 2011 seizure of gold deposits held and developed by the company.
In 2012, Elliott Management, a US hedge fund that held troubled Argentine bonds, seized a beautiful tall ship owned by the Argentine Navy.
Recently, French courts ruled that a strangled creditor could seize a business jet owned by the government of Congo-Brazzaville while it was on duty at a French airport, as well as $ 30 million in a bank account there. ‘Oil state of the country. business.
In May, the Ministry of Finance said the tribunal “has inappropriately exercised jurisdiction over a domestic tax dispute that the Republic of India has never offered and / or agreed to arbitrate.”
The ministry called the 2006 reorganization of Cairn’s Indian business for listing on local stock exchanges “an abusive tax evasion scheme constituting a flagrant violation of Indian tax laws, thus depriving Cairn’s alleged investments of any protection in the country. India-UK bilateral investment framework. treaty “.
The Scottish company invested in the oil and gas industry in India in 1994 and a decade later made a huge oil discovery in Rajasthan. In 2006, she listed her Indian assets for BSE. Five years later, the government passed retroactive tax law and charged Cairn Rs 10,247 crore plus interest and penalties for the reorganization related to the issue.
(Except for the title, this story was not edited by NDTV staff and is posted from a syndicated feed.)