Cairn Energy freezes Indian property in Paris after French court order: Report
Cairn Energy, which is embroiled in an arbitration battle against the Indian government in international courts, has drawn first blood after a French court gave its green light to seize Indian public sector assets in Paris, reported the Financial Times on Thursday. The Indian government stares at losing as many as 20 of its properties in the France capital following the court order.
The move comes as an escalation of the tussle between India and Britain's Cairn Energy. It has identified $70 billion of Indian assets overseas, ranging from buildings to Air India aircraft, for potential seizure to collect award, which now totals $1.72 billion after including interest and penalty.
Cairn was awarded the sum last year following a long-running arbitration.
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 €20m, including in the 16th and 14th arrondissements. According to the report by the Financial Times, the French court had authorised the freeze.
The move is similar to a court in the British Virgin Islands ordering in December last year hotels in New York and Paris owned by Pakistan International Airlines to be used to settle a claim against Pakistan's government by a Canadian-Chilean copper company.
The Scottish firm invested in the oil and gas sector in India in 1994 and a decade later it made a huge oil discovery in Rajasthan. In 2006, it listed its Indian assets on the BSE. Five years after that, the government passed a retroactive tax law and billed Cairn Rs 10,247 crore plus interest and penalty for the reorganisation tied to the flotation.
The state then expropriated and liquidated Cairn's remaining shares in the Indian entity, seized dividends and withheld tax refunds to recover a part of the demand.
Cairn challenged the move before an arbitration tribunal in The Hague, which in December awarded it $1.2 billion (over Rs 8,800 crore) plus costs and interest, which totals $1.725 million (Rs 12,600 crore) as of December 2020.
The company, which previously said the ruling was binding and enforceable under international treaty law, has been since then courting Indian government officials to get the money paid. But the government has not agreed to pay.