BackGovt confirms Cairn secured order to freeze Indian assets
Despite the litigation, both the Indian government and Cairn remain open to an amicable settlement. India, however, has said that the settlement has to be within existing local laws
PremiumNEW DELHI: The Union government on Tuesday confirmed that Cairn Energy Plc. has secured an order to freeze certain Indian assets in Paris in connection with a dispute with the British oil company.
Minister of state for finance Pankaj Chaudhary, in written response to a question in Rajya Sabha, said India has appealed against an arbitration award secured by the company in December 2020. Cairn is seeking to enforce this award by taking over India’s overseas assets. The award of $1.2 billion in damages plus interest and cost won by Cairn is now worth over $1.7 billion.
“Yes Sir, an order has been passed by a French Court freezing certain Indian Government properties in the case pertaining to Cairn Energy," Chaudhary said in his response.
The minister also informed the House that for handling enforcement proceedings, an international law firm, with relevant experience, has been engaged. “In consultation with its counsel team, the government is taking all appropriate legal steps to protect its interest," the minister explained.
Mint had reported on 8 July that the Indian government has vowed to vigorously defend its case in the tax battle with Cairn Energy and take “appropriate legal remedies" against the court order secured by the British explorer to freeze 20 Indian assets in Paris.
India’s dispute with Cairn is over an internal re-organization of the company’s India business in 2006-07 prior to its initial public offering. The tax demand was raised invoking a 2012 change in the Income Tax Act that was retroactive.
In spite of the case getting mired in litigation, both the Indian government and Cairn remain open to an amicable settlement. India, however, maintains that the settlement has to be within existing local laws. A spokesperson for Cairn Energy told Mint earlier this month that the company’s “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 company is taking steps to enforce the award as a settlement seems elusive.
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