Cairn Energy says it won order to freeze India assets

Edinburgh-based international oil and gas company Cairn Energy said on Thursday that a Paris court accepted its petition that Indian state-owned assets in the city worth over $24 million be frozen, according to a Reuters report.

The development is a significant step in Cairn’s attempt to enforce a $1.2 billion arbitration award it won in a tax dispute against India in December last year.

Cairn said a French tribunal ordered the freeze on 20 Paris properties belonging to the Indian government as part of a guarantee of the amount owed to the Edinburgh firm..

Cairn said it has also registered similar claims against India in courts in the United States, UK, the Netherlands, Singapore and Quebec.

India’s government said in a statement it had not received any communication on the issue from any French court — and that it would “take appropriate legal remedies” once any notice is received.

“This is the necessary preparatory step to taking ownership of the properties and ensures that the proceeds of any sales would be due to Cairn,” the company said.

Cairn was awarded damages of more than $1.2 billion, plus interest and costs, in December by the Permanent Court of Arbitration at The Hague in a long drawn-out fight with the Indian government over certain retrospective tax claims.

Cairn said it is now owed $1.7 billion in total.

India has filed an appeal against the damages ruling, but Cairn in the meantime has identified Indian assets overseas, including assets of Air India, that the Edinburgh firm says could be seized in the absence of a settlement.

“Our strong preference remains an agreed, amicable settlement with the government of India to draw this matter to a close,” the company said.

The Indian government said it will “vigorously defend its case”.

It also said Cairn’s chief executive has approached the government for discussions to resolve the matter.

“Constructive discussions have been held and the government remains open for an amicable solution to the dispute within the country’s legal framework,” the government said.

The dispute began in 2012 after a previous Indian government decided to impose capital gains tax retrospectively on some companies.

Cairn Energy corporate affairs boss David Nisbet told the BBC’s Today programme: “It is a long-running story unfortunately, and one we wished hadn’t actually taken place.

“Clearly what we want to do is find an agreed amicable settlement with the government of India,” he said.

“But this is all just part of a process of saying: ‘Look India, we need to earnestly engage’, but we also have a fiduciary duty to protect the rights of our shareholders.”

He said that more than six months after the ruling by the international tribunal, despite discussions in Delhi on two occasions, India has not said it will honour it.

“We have to protect the rights of our shareholders,” Nisbet said.

“And our international shareholders, who have waited patiently for seven and half years, would expect us to do so.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.