For getting its $1.2-bn arbitration, Cairn sues Air India in US

British oil firm Cairn Energy Plc has initiated the method to grab Indian property and has introduced a lawsuit within the US in opposition to nationwide service Air India to implement the $1.2-billion arbitration award it gained in opposition to the Indian authorities in a longstanding tax dispute.
Sources in New Delhi stated that the Centre will take “all necessary steps to defend against any such illegal enforcement action”.
Cairn filed the lawsuit Friday within the US District Court for the Southern District of New York, in search of to make disinvestment-bound Air India responsible for the judgment that was awarded to Cairn, Reuters reported.
The lawsuit argued that the service, as a state-owned firm, is “legally indistinct from the state itself”.
“The nominal distinction between India and Air India is illusory and serves only to aid India in improperly shielding its assets from creditors like (Cairn),” the report quoted from the stated courtroom submitting.
This comes lower than every week after Cairn Energy’s chief govt Simon Thomson informed the corporate’s shareholders that the agency was persevering with “constructive engagement with the Government of India whilst at the same time taking all necessary actions to protect our rights to the award and access the value of it as early as possible”.
A question despatched to Cairn Energy didn’t elicit a response. The Finance Ministry, the Ministry of Civil Aviation and Air India didn’t reply to questionnaires despatched by this newspaper.
The Government had challenged in a courtroom in The Hague the arbitration tribunal verdict that overturned its demand for again taxes from Cairn. The Permanent Court of Arbitration (PCA) at The Hague in December 2020 had dominated that the Indian authorities’s retrospective tax demand on Cairn Energy was “in breach of the guarantee of fair and equitable treatment”, and in opposition to the India-UK bilateral treaty.
“There are some news reports in the media that Cairn has initiated some action against a PSU to enforce the award. Government/PSU has not received any such notice. As and when any such notice is received, Government/concerned organisation shall take all necessary steps to defend against any such illegal enforcement action,” an official concerned within the course of stated.
“The Government challenged the award in the case of Cairn in the appropriate court in the Hague and the Government is confident that the award will be set aside. The Government has also engaged a counsel team which is ready to defend it against any enforcement action if and when initiated by Cairn anywhere in the world,” the official added.
Currently, Air India flies wide-bodied planes from India to New York, Newark, San Francisco, Chicago and Washington DC within the US, and has gross sales places of work in a few of these places.
It can also be the one Indian airline to fly to those locations The loss-making airline can also be in superior levels of being disinvested by the Government of India, with the Centre saying that a number of entities had submitted expressions of curiosity. This included Mumbai-based conglomerate Tata Group.
There are precedents of firms shifting to grab government-owned abroad property to implement an arbitration award. In 2019, American agency ConocoPhillips moved US courts to grab property of Venezuelan state-owned oil firm PDVSA to get better $2 billion it had gained in arbitration in opposition to Venezuela’s 2007 takeover of its property. Thereafter, PDVSA paid its dues to the ConocoPhillips.
Similarly, a cargo agent at Amsterdam’s Schiphol Airport had seized a Jet Airways plane in 2019 over unpaid dues. Also, earlier this 12 months, a Malaysian courtroom allowed Dublin-based plane lessor AerCap to grab a Pakistan International Airlines-owned Boeing 777 airplane in Kuala Lumpur over unpaid dues.