Cairn Energy, Scottish oil producer said that the French Court has allowed them to freeze Indian state-owned properties in Paris towards the settlement of the international arbitration order, according to a report published in the Financial Times. This has come after India had filed an appeal against the tribunal’s decision that asked the Indian government to pay Cairn $1.2 billion. “On June 11, the French court had ordered Cairn Energy’s take-over of Indian government properties, mostly comprising flat; and the legal process got completed on Wednesday evening,” PTI reported.
The company said it would effectively transfer the ownership of 20 properties of the government, valued at more than €20 million, according to report, according to the Financial Times. Cairn said Tribunal Judiciaire de Paris’s order was a “necessary preparatory step to taking ownership of the properties and ensures that the proceeds of any sales would be due to Cairn”, the publication mentioned.
In December 2020, an international tribunal said that India violated its obligations under UK-India bilateral investment treaty in 2014 through the levy of taxes. It asked the Indian government to pay the funds worth $1.2 billion withheld along with the interest to the oil explorer for seizing dividend, tax refund, and sale of shares to partly recover the dues.
“Where I find arbitration award questioning India’s sovereign authority to tax… if there is a question about the sovereign right to tax, I will appeal, it’s my duty to appeal,” finance minister Nirmala Sitharaman said earlier.
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After India’s refusal to follow the arbitration order, Cairn had moved courts in the United States, United Kingdom, Netherlands, Canada, France, Singapore, Japan, UAE and Cayman Islands to get the case registered and recognised.
In a letter to the Indian government earlier this year, British energy major had indicated it could seize overseas assets such as bank accounts, payments to state-owned entities, aeroplanes and ships if New Delhi fails to comply with the arbitration award and return the value of the shares sold, dividend seized and tax refund withheld by the income tax department to recover part of the tax demand it had raised using retrospective legislation.
“The arbitration is now finalised and the award has been given. We would request along with the others the Indian government move swiftly to adhere to the award that has been given. That is important. It is important for our shareholders who are global financial institutions and who want to see a positive investment climate in India,” said Simon Thomson, chief executive officer, Cairn Energy said earlier.
In May, Cairn Energy Plc sued India’s national carrier Air India in the US District Court for the Southern District of New York. The UK-based group has identified $70 billion of Indian assets overseas for potential seizure to collect the amount, which now totals to $1.72 billion after including interest and penalty, according to PTI.
(With inputs from agencies)
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