India to take appropriate legal action when it gets French court order on Paris assets seizure

India will take appropriate legal remedies in consultation with its counsel when it receives any communication regarding order by a French court approving seizure of Indian assets by Cairn Energy in Paris.
According to reports, Cairn Energy has seized about 20 residential properties owned by the Indian government in Paris, following permission from French court Tribunal judiciaire de Paris as part of a guarantee of the debt owed to the company. The properties located in central Paris are valued at over Euros 20 million.

Indian government said that it had not received any kind of communication or notice to the effect.

"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," the finance ministry said in a statement Thursday.

India 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 source said.

"It is also stated that the CEO and the representatives of Cairn have approached the 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," the ministry added.



The action in France is the latest step in Cairn’s enforcement strategy of pursuing the Indian government across multiple jurisdictions towards settlement of the Permanent Court of Arbitration at The Hague order in December last year that had asked the government to pay the UK based energy major $1.2 billion in damages, plus interest and costs in a tax dispute.

The Court had ordered the government to return the value of shares it had sold, dividends seized and tax refunds withheld.

The company had said that the total due is nearly $1.7 billion.

"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. However, in the absence of such a settlement, Cairn must take all necessary legal actions to protect the interests of its international shareholders," Cairn Energy said in a statement.

London-listed Cairn is pursuing the Government of India in multiple jurisdictions, primarily focused on regions with high value assets.

Last month Cairn filed a petition with the courts in the Southern District of New York, seeking judicial confirmation that Air India, the national carrier, can be classed as the alter ego of the Indian state and
thereby jointly liable for the arbitral award.

The arbitration award has also been registered in many other jurisdictions, including the US, UK, Canada, Singapore, Mauritius, France and the Netherlands.

Indian government has also engaged a team of lawyers to fight any enforcement action.

India has argued that the arbitral tribunal improperly exercised jurisdiction over a national tax dispute that India never offered or agreed to arbitrate.

It has maintained that the claims underlying the award were based on an abusive tax avoidance scheme that were a gross violation of Indian tax laws, thereby depriving Cairn’s alleged investments of any protection under the India-UK bilateral investment treaty.

The dispute arose in 2015 after the government demanded capital gains tax of Rs 10,200 crore plus interest and penalty over a reorganisation of assets that Cairn undertook at its India unit in 2006, ahead of the listing of its shares in 2007.