Cairn Energy considers assets of government companies to recover money


Cairn Energy plans to target the assets of Indian state-owned companies to recover its contributions

After Air India, Britain’s Cairn Energy PLC plans to target assets of state-owned companies and banks in countries ranging from the United States to Singapore, as it seeks to step up efforts to recover the amount owed by the Indian government , after winning an arbitration against the retrospective tax levy.

An attorney representing the company said Cairn would file lawsuits in several countries to force state-owned companies to pay the $ 1.2 billion plus interest and penalties owed by the Indian government.

Last month, Cairn filed a lawsuit in the US District Court for the Southern District of New York, arguing that Air India is so controlled by the Indian government that it is an “alter ego” and that the airline should be held responsible for the arbitration award.

“We are planning to take enforcement action for a number of state-owned enterprises. Enforcement actions will be implemented soon and it may not be in the United States,” said Dennis Hranitzky, Head of Sovereign Litigation Practice at Quinn Emanuel Urquhart & Sullivan, a law firm. representing the company, said PTI.

A three-member international arbitration tribunal composed of a judge appointed by India unanimously quashed the Cairn tax levy in December and ordered the repayment of the shares sold, the confiscation of dividends and the repayments of ‘taxes withheld to collect this claim.

The government, despite having participated in the arbitration process for four years, did not accept the award and filed a request for annulment in a court in the Netherlands – the seat of the arbitration.

Pressed by his shareholders, Cairn seeks to recover the price by confiscating the assets and bank accounts of public entities in foreign countries.

“The (arbitral) award is registered and either recognized or soon recognized in several countries, and Cairn will continue to intensify enforcement proceedings around the world to seek the value of the award for its international shareholders,” he said. -he declares.

He declined to name the companies Cairn will target or the countries where lawsuits will be brought, however.

Cairn has already registered and recognized the arbitral award in the United States, United Kingdom, Netherlands, France, Canada and Singapore.

In the Air India case, the national airline has time until mid-July to file a plea challenging the Cairn lawsuit, sources familiar with the case said.

The airline, which is in the process of being privatized, is likely to argue that it is a separate entity and not the alter ego of the Indian government and that it cannot be forced to pay for any government responsibility, they said.

Cairn has identified $ 70 billion in Indian assets abroad for potential foreclosure in order to collect the price, which now totals $ 1.72 billion after including interest and penalties.

The assets identified range from Air India planes to ships owned by the Shipping Corporation of India, and properties owned by state-owned banks to PSU’s oil and gas cargoes, the sources said.


Leave A Reply