NEW DELHI: Oil and gas exploration giant Cairn Energy has filed a case in a US district court to enforce a $1.2 billion arbitration award it won in a tax dispute against India recently. According to a report from news agency Reuters citing a court document, the British firm has asked the US court to recognise and confirm the award, including payments due since 2014 and interest compounded semi-annually.
An arbitration body had in December 2020 awarded Cairn damages of more than $1.2 billion plus interest and costs. The tribunal has ruled that India breached an investment treaty with Britain and said New Delhi was liable to pay Cairn the mandated dues. This case was the biggest big arbitration loss for India and the second in quick succession. India had lost another major international arbitration case last year against Vodafone, again over a $2 billion retrospective tax dispute.
This present case marks the first step in Cairn’s efforts towards recovering its dues, potentially by seizing Indian assets, if the government does not pay, a source with knowledge of the arbitration case told Reuters. “If Cairn wins the case, it will be a step towards attaching and seizing Indian assets overseas, especially in the U.S.” Reuters had also reported last month that Cairn was identifying India’s overseas assets that could be seized in the absence of a settlement.
Cairn Energy Chief Executive Simon Thomson, on February 9, had said in a tweet that he was looking forward to meeting India’s Finance Minister in Delhi next week. He had also said in the video posted on Twitter by Cairn that the company requests that “the Indian government move swiftly to adhere to the award that has been given”.
“It is important for our shareholders who are global financial institutions and who want to see a positive investment climate in India. I am sure that in working together with the government we can swiftly draw this to conclusion and reassure those investors,” Thomson had added.