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.
However, the government denied all knowledge of the award. It said it had filed an appeal against the tribunal decision of the Permanent 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.
Earlier, a Cairn Energy spokesperson had told The Hindu that the ball is in India’s court to stop the enforcement proceedings of assets. “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 in a statement.
“However, in the absence of such a settlement, Cairn must take all necessary legal actions to protect the interests of its international shareholders,” the statement added.
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 delivered in December last in Cairn’s 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 June, Cairn lawyers had 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 said that other state-owned corporations could be targeted as well. The government has until next week to file its challenge in that court.
“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.
Despite the snowballing dispute, both the government and Cairn Energy said they were open to continuing talks over the issue. 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, ruling that the tax fell afoul of the bilateral investment pact.(The Hindu)
