After Air India, Britain’s Cairn NSE 0.81% Energy PLC is planning to target the assets of state-owned firms and banks in countries from the US to Singapore as it looks to ramp up efforts to recover the dues from the Government of India after winning arbitration against the levy of retrospective taxes.
A lawyer representing the company said Cairn will bring litigation in several countries to make state-owned firms liable to pay 1,200,00,000 plus interest and penalties USD payable from the Government of India.
Last month, Cairn brought a case in the US District Court for the Southern District of New York arguing that Air India is controlled by the Government of India so that they “change egos” and the airline should be held liable for arbitration awards.
“There are many state enterprises which we are considering for enforcement action. Enforcement action will take place soon and may not take place in the US, said Dennis Harnitzki, head of sovereign litigation practice at Quinn Emanuel Urquart & Sullivan, a law firm representing the company.
A three-member International Arbitration Tribunal of a judge appointed by India unanimously overturned the levy of taxes on Cairn in December with retrospective effect and ordered confiscation of shares, dividends and refunds sold to fix such demands.
The Government of India, despite participating in arbitration proceedings in four years, has not accepted the award and has filed a ‘separate’ petition in a Court in the Netherlands – the seat of arbitration.
Pressed by its shareholders- some of whom are biggies the financial world, Cairn is seeking recovery of the award by confiscating the assets and bank accounts of state-owned entities abroad.
“The (arbitration) award is registered and is either recognized or soon recognized in many countries, and Cairn will continue to ramp up enforcement proceedings around the world to further the value of the award for its international shareholders,” he said.
However, he either refused to name companies that would target Cairn or countries where litigation would be filed.
Cairn has already received and recognized arbitration awards in the US, UK, Netherlands, France, Canada and Singapore.
Sources familiar with the matter said, in the Case of Air India, the national flag carrier has time till mid-July to file a petition fighting the Cairn suit.
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