Cairn Energy says it has freezed Indian state-owned properties in Paris, marking an escalation of the fight between the Scottish oil producer and the Indian government, London’s Financial Times reported.
Cairn’s action by is the latest attempt to force India to pay $1.7bn awarded by an international tribunal over a tax dispute. Its asset freeze application in Paris is the first to succeed. The company said it would effectively transfer the ownership of 20 properties valued at more than €20m, including in the 16th and 14th arrondissements. Financial Times said it had seen official documents that confirmed a French court had authorised the freeze.
Indian news agency PTI reports a French court on June 11 ordered Cairn Energy’s take-over of Indian government properties and the legal process was completed Wednesday evening.
The oil group said the freeze on the properties approved by the French Court, Tribunal Judiciaire de Paris, was a “necessary preparatory step to taking ownership of the properties and ensures that the proceeds of any sales would be due to Cairn”.
Cairn Energy sued Air India in May to enforce the arbitration award that it won in a tax dispute against India, further complicating the state's efforts to sell the loss-making airline.
Shareholders in Devas Multimedia have sued Air India in an effort to recover sums Devas won in arbitration awards against the Indian government and seize its flagship carrier's foreign assets, media reports said last month.
India has challenged the arbitration award to Cairn on grounds that it had never agreed to arbitrate over a "national tax dispute".
India had seized and sold shares of Cairn in its erstwhile India unit, confiscated dividend due and withheld tax refunds to recover the tax demand it had levied two years after passing a law in 2012 that gave it powers to levy tax retrospectively.
Cairn invoked arbitration under the India-UK bilateral investment treaty. In December last year, Cairn won an award that held the levy of taxes using the 2012 law unfair on the company and the tribunal asked the Indian government to return $ 1.2 billion plus cost and interest.
The tribunal "improperly exercised jurisdiction over a national tax dispute that the Republic of India never offered and/or agreed to arbitrate," said India's finance ministry in May.
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Cairn Energy freezes 20 Indian state-owned properties in Paris: Reports - Business Standard
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