Cairn threatens to seize Indian assets overseas to collect $1.4 billion arbitration award
The British firm has begun identifying overseas Indian assets, including Indian bank accounts, airplanes and other foreign properties, in case the Indian government fails to honour the arbitration award
PTI | January 26, 2021 | Updated 18:38 IST
If India fails to comply with the arbitration award, it would be a violation of international rules commonly called the New York Convention
Just like US oil firm ConocoPhillips grabbed Venezuelan assets overseas to enforce an arbitration award, Indian bank accounts, airplanes and other foreign properties can be seized to collect USD 1.4 billion awarded to UK s Cairn Energy against Indian retro tax, according to a letter seen by PTI.
Cairn mulls enforcing $1.4-b arbitration award against Indian assets overseas
PTI
New Delhi |
Updated on
January 26, 2021
The company has begun identifying overseas assets in case India fails to honour the award
Just like US oil firm ConocoPhillips grabbed Venezuelan assets overseas to enforce an arbitration award, Indian bank accounts, airplanes and other foreign properties can be seized to collect $1.4 billion awarded to UK’s Cairn Energy against Indian retro tax, according to a letter seen by PTI.
The British firm has begun identifying overseas Indian assets in case the Indian government fails to honour the arbitration award.
Cairn CEO Simon Thomson in the January 22 letter to Indian High Commissioner in London, with copies marked to Prime Minister’s Office, Finance Minister Nirmala Sitharaman and External Affairs Minister S Jaishankar, the arbitration award is “final and binding” and “the Government of India has an obligation to comply with its terms.”
An international arbitration tribunal has directed the Indian government to pay $1.2 billion in damages to UK’s Cairn Energy the second such embarrassing loss for the Modi government following the one to Vodafone in another arbitration matter just three months back. Both the cases were against a controversial 2012 retrospective tax legislation that gave the Indian government the power to go after M&A deals all the way back to 1962 if the underlying asset was in India.
The international arbitration tribunal ruled unanimously that India had breached its obligations to Cairn under the UK-India Bilateral Investment Treaty and awarded Cairn damages of $1.2 billion plus interest and costs, Cairn Energy said in its statement.
BW Businessworld
India Ordered to Return $1.2 Bn to Cairn Energy
Cairn Energy wins arbitration against India over tax dispute. Cairn Energy, in 2015, had initiated an international arbitration to challenge retrospective taxation.
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UK s Cairn Energy has won an international arbitration case against the Indian government over Rs 10,247 crore retrospective tax. With the Permanent Court of Arbitration at The Hague awarded the arbitration in favour of Cairn in a verdict that came late night on Tuesday, the Indian government has been asked to pay the British firm over Rs 7,600 crore to reverse the dividend and tax refund it had ceased and shares it sold to recover part of the tax demand.