Companies

Move to freeze India’s Assets in France: Will pursue all legal options against Cairn, says Govt

Our Bureau New Delhi | Updated on July 08, 2021

Cairn says it has identified $70-billion of assets around the world   -  via Bloomberg

Says not got any notice from French court; adds that it is ready for an amicable settlement on the tax row

The Finance Ministry has said that once facts regarding Cairn Energy’s reported move to freeze Indian government’s properties in France are ascertained, it will take all possible legal recourse. The Ministry also said that it remains open to an amicable solution on tax dispute with the Scottish oil company.

A London-based newspaper has reported that the Scottish oil producer had effectively seized Indian state-owned properties in Paris worth ₹180 crore. Cairn’s action is the latest attempt to force India to pay $1.7 billion awarded by an international tribunal over a tax dispute in December last year.

According to a statement issued by the Finance Ministry, there have been news reports that Cairn Energy had seized state-owned assets of the Indian Government in Paris. However, the Government has not received any notice, order or communication, in this regard, from any French Court. “We are trying to ascertain the facts, and whenever such an order is received, Government of India will take appropriate legal remedies in consultation with its counsels,” the statement said.

Further, it reiterated that the 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. “The Government of India will vigorously defend its case in set aside proceedings at The Hague,” it said.

The statement also said the CEO and the representatives of Cairn have approached Government of India for discussions to resolve the matter. “Constructive discussions have been held and the government remains open for an amicable solution to the dispute within the country’s legal framework,” it said.

$70-billion of assets

Meanwhile, the newspaper wrote that the company says it has identified $70-billion of assets around the world ranging from buildings to Air India aircraft that it may try to seize if the Indian government refuses to pay. Its asset freeze application in Paris is the first to succeed. The company said it would effectively transfer the ownership of 20 properties valued at more than €20 million, including in the 16th and 14th arrondissements.

Earlier in May, the company had filed a lawsuit in US Court against Air India to enforce a $1.2-billion tax arbitration award which it won against India. “Cairn is taking the necessary legal steps to protect shareholders’ interests in the absence of a resolution to the arbitral award,” a company spokesperson said. He added that the company remains open to continuing constructive dialogue with the Indian Government to arrive at a satisfactory outcome to this long-running issue.

In the beginning of this year, Cairn moved courts in the US, the UK, the Netherlands, Canada, France, Singapore, Japan, the UAE and Cayman Islands to get the December 21 international arbitration tribunal award registered and recognised. This was the first step that would allow it to seize assets of the government in those jurisdictions in case India did not return the value of the shares seized and sold, confiscated dividends, and tax refunds to adjust a ₹10,247-crore tax demand raised by a retrospective legislation.

Published on July 08, 2021

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