NEW DELHI: Even as the French court has ordered the seizure of Indian government properties in Paris to help Cairn Energy recover $1.7 billion in arbitral award, the Indian government has been saying that it will vigorously defend its case in set aside proceedings at the Hague Court, where it filed an appeal on March 22 2021 against the arbitration award.
However, legal experts are of the opinion that the Indian government's appeal in Hague against the award will not help it in avoiding the seizure proceedings in France, where the court has allowed Cairn Energy to attach 20 Paris-based centrally located properties of the Indian government. These properties are valued at more than $20 million Euros.
Lawyers involved in the litigation told The New Indian Express that the only way the government can avoid the attachment of the properties in Paris is by appealing to the local French court which has given a go ahead to the seizure procedures.
"The strategy to be adopted by the government is to go to these jurisdictions where Cairn is trying to enforce the arbitration award, and defend its properties against such procedures," says Mani Gupta, partner, Sarthak Advocates and Solicitors.
She says that the first step for the government would be to figure out which assets are likely to be attached after the court order.
"In France in particular, several categories of assets are considered as non-commercial assets, and such assets cannot be subjected to seizure in the enforcement of an award," says Mani Gupta.
Non-commercial assets include those that are part of the cultural heritage, such as archives, as also bank accounts that are used for consular or diplomatic missions.
So, before the Indian government can even do anything, it needs the details of these assets, and depending on what they are used for, it can file its defence to the proceedings in France.
India's appeal in Hague is likely to come up for hearing on September 1, and as per legal experts both the proceedings – India's appeal in Hague and Cairn Energy's seizure proceedings – can go on simultaneously.
They are also not too hopeful that India may get any relief from its appeal in the Hague Court of arbitration. "Though parties apply for stay in enforcement proceedings, but in international arbitration that is rarely given," says a lawyer.
The Indian government's stand so far has been that tax disputes should be kept out of the ambit of bilateral investment treaty, under which Cairn Energy had won the arbitration case.
"The Hague court will have to agree with the Indian government stand and if it does not agree with that then that is the end of the road for India," says Mukesh Butani, managing partner, BMR Legal Advocates.
Cairn Energy has won an international arbitration against India in the matter involving retrospective tax. The Hague court of arbitration has found that the Indian government's decision to change tax rules retrospectively was in breach of its obligations to Cairn under the UK-India Bilateral Investment Treaty.