Cairn Energy to seize 20 Indian properties in Paris; GoI says no notice yet on move

Cairn Vitality to grab 20 Indian properties in Paris; GoI says no discover but on transfer

A 3-member worldwide arbitration tribunal that consisted of 1 choose appointed by India, had in December final 12 months unanimously overturned levy of taxes on Cairn retrospectively and ordered refund.

In a setback to India, Britain’s Cairn Vitality Plc has secured a French court docket order to grab some 20 authorities properties in Paris to get better part of the $1.7 billion due from New Delhi following an arbitration panel overturning levy of retrospective taxes.

The centrally situated properties largely comprise of flats, valued at greater than €20 million, have been utilized by the Indian authorities institution in France, three individuals with direct data of the matter stated.

The Indian authorities, nonetheless, has denied any data of such a transfer and promised an acceptable authorized response as and once they collect all of the info.

“There have been information studies that Cairn Vitality has seized State-owned property of the Authorities of India in Paris. Nevertheless, Govt. of India has not obtained any discover, order or communication, on this regard, from any French Courtroom. We try to establish the info, and each time such an order is obtained, the Authorities of India will take acceptable authorized cures in session with its Counsels,” the Ministry of Finance stated in a press release.

The federal government has already filed an utility on 22 March 2021 to put aside the December 2020 worldwide arbitral award in The Hague Courtroom of Enchantment. The Authorities of India will vigorously defend its case in ‘Set Apart proceedings’ at The Hague, it added.

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The French court docket, Tribunal judiciaire de Paris, on 11 June agreed to Cairn’s utility to freeze (by judicial mortgages) residential actual property owned by the Authorities of India in central Paris, they stated including the authorized formalities for a similar was accomplished on Wednesday night.

Whereas Cairn is unlikely to evict the Indian officers residing in these properties, the federal government can’t promote them after the court docket order.

A 3-member worldwide arbitration tribunal that consisted of 1 choose appointed by India, had in December final 12 months unanimously overturned levy of taxes on Cairn retrospectively and ordered refund of shares offered, dividend confiscated and tax refunds withheld to get better such demand.

With the Indian authorities refusing to honour the award, Cairn has moved in a number of abroad jurisdictions to implement the award by seizing Indian property.

Final month, Cairn introduced a lawsuit within the US District Courtroom for the Southern District of New York pleading that Air India is managed by the Indian authorities a lot that they’re ‘alter egos’ and the airline needs to be held accountable for the arbitration award.

Comparable lawsuits are prone to be introduced in different international locations, primarily with high-value property. The arbitration award has been registered in international locations such because the US, UK, Canada, Singapore, Mauritius, France and the Netherlands.

Cairn has recognized $70 billion of Indian property abroad for the potential seizure to gather award, which now totals to $1.72 billion after together with curiosity and penalty.

Whereas the finance ministry didn’t instantly supply feedback on the matter, a Cairn spokesperson stated: “Our robust desire stays an agreed, amicable settlement with the Authorities of India to attract this matter to an in depth, and to that finish we now have submitted an in depth collection of proposals to them since February this 12 months.”

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“Nevertheless, within the absence of such a settlement, Cairn should take all essential authorized actions to guard the pursuits of its worldwide shareholders,” the spokesperson stated with out elaborating.

Sources stated the French court docket order impacts some 20 centrally situated properties, belonging to the Indian authorities, as a part of a assure of the debt owed to Cairn.

“That is the required preparatory step to taking possession of the properties and ensures that the proceeds of any gross sales could be on account of Cairn,” one of many individuals stated.

Final month Cairn filed a petition with the courts within the Southern District of New York, searching for judicial affirmation that Air India, the nationwide service, could be classed because the alter ego of the Indian state and thereby collectively accountable for the arbitral award.

Air India has time until mid-July to file a plea contesting the Cairn lawsuit, sources stated.

The Authorities of India, which participated within the arbitration continuing over 4 years, has not accepted the award and has filed a ‘setting apart’ petition in a court docket within the Netherlands – the seat of the arbitration.

The transfer by Cairn is much like a court docket within the British Virgin Islands ordering in December final 12 months inns in New York and Paris owned by Pakistan Worldwide Airways for use to settle a declare in opposition to Pakistan’s authorities by a Canadian-Chilean copper firm.

Crystallex Worldwide Corp had introduced an analogous lawsuit to connect property of Petroleos de Venezuela, S.A (PDVSA), the state-owned oil firm of Venezuela, in Delaware couple of years again after the Latin American nation did not pay the agency USD 1.2 billion that an arbitration tribunal had ordered to pay in lieu of the 2011 seizing gold deposits held and developed by the agency.

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In 2012, Elliott Administration, a buccaneering American hedge fund that held distressed Argentine bonds, seized a good-looking tall ship belonging to Argentina’s navy.

Lately, French courts dominated {that a} stifled creditor may seize a enterprise jet belonging to the federal government of Congo-Brazzaville whereas it was being serviced at a French airport, in addition to $30 million from a checking account of the nation’s state oil firm.

In Could, the finance ministry stated that the tribunal “improperly exercised jurisdiction over a nationwide tax dispute that the Republic of India by no means supplied and/or agreed to arbitrate”.

The ministry referred to as the 2006 reorganisation of Cairn’s India enterprise for itemizing on the native bourses as an “abusive tax avoidance scheme that was a gross violation of Indian tax legal guidelines, thereby depriving Cairn’s alleged investments of any safety below the India-UK bilateral funding treaty”.

The Scottish agency invested within the oil and gasoline sector in India in 1994 and a decade later it made an enormous oil discovery in Rajasthan. In 2006 it listed its Indian property on the BSE. 5 years after that the federal government handed retroactive tax legislation and billed Cairn Rs 10,247 crore plus curiosity and penalty for the reorganisation tied to the flotation.

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