Cairn Energy secures French court order to seize Indian govt properties worth over 20 million Euros

Meanwhile, the Indian government in a statement has said that it has not received any notice, order or communication in this regard from any French court
Cairn Energy refinery (Photo courtesy : Cairn media library)
Cairn Energy refinery (Photo courtesy : Cairn media library)

After a recent French court order allowed it to seize Indian assets in Paris to recover a part of a $1.7 billion arbitral order, the UK-based Cairn Energy has said that the order affects some 20 centrally located properties, belonging to the Indian government and valued at more than 20 million Euros, as part of a guarantee of the debt owed to Cairn Energy PLC.

Cairn says this is the necessary preparatory step to taking ownership of the properties and ensures that the proceeds of any sales would be due to it.

It further said in a statement that the award is enforceable against India-owned assets in more than 160 countries that have signed and ratified the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Cairn says that to date, it is pursuing the issue in multiple jurisdictions, primarily focused on regions with high value assets.

Last month, the company had filed a petition with the courts in the Southern District of New York, seeking judicial confirmation that Air India, the national carrier, which, it had argued in the court, could be classed as the alter ego of the Indian state, was thereby jointly liable for the arbitral award.

The arbitration award has also been registered in many other jurisdictions, including the US, UK, Canada, Singapore, Mauritius, France and the Netherlands.

However, the UK-based energy major says that Cairn remains in ongoing dialogue with the government of India on fulfilment of award payment and this engagement continues in parallel with pursuing options of enforcement and monetisation of the award to safeguard shareholders’ rights.

A spokesperson told The New Indian Express: “Our strong preference remains an agreed, amicable settlement with the government of India to draw this matter to a close, and to that end we have submitted a detailed series of proposals to them since February this year. However, in the absence of such a settlement, Cairn Energy must take all necessary legal actions to protect the interests of its international shareholders.”

In a note issued to the media, Cairn Energy has listed examples of attachments of sovereign assets. This includes attachment of the holding companies for the Roosevelt Hotel in Manhattan and Scribe Hotel in Paris, both owned by Pakistan International Airways to meet an unpaid investment treaty arbitration award of $4 billion plus interest in December 2020. This was after Pakistan lost an international arbitration case against Tethyan Copper Company (TCC) after cancelling the contract that awarded them the Reko Diq gold and copper mines.

The list also includes the example of the Thai crown prince’s Boeing 737 plane being impounded in 2011 at Munich Airport to meet an unpaid investment treaty arbitration award of 29 million Euros plus interest.

Meanwhile, the Indian government in a statement has said that it has not received any notice, order or communication in this regard from any French court.

The statement by the Indian government says that it is trying to ascertain the facts, and whenever such an order is received, appropriate legal remedies will be taken, in consultation with its counsels, to protect the interests of India.

The government has already filed an application on March 22, 2021 to set aside the December 2020 international arbitral award in The Hague Court of Appeal.

The government further said that it will vigorously defend its case in the proceedings at The Hague.

It also stated that the CEO and representatives of Cairns have approached the government of India 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.

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