The Narendra Modi-led administration on Thursday said that it has not received any “notice, order or communication” from any French court about Scottish oil company Cairn Energy’s seizure of the Indian government’s properties in Paris.
The clarification came after the Financial Times reported that a French court had seized the Indian government’s properties in Paris in connection with a tax dispute case. The newspaper reported that a court in France had authorised the freeze on the India-owned assets.
The oil company’s move was its latest attempt to get India to pay $1.7 billion [approximately Rs 12,695 crore] in the tax dispute case, according to the newspaper.
In December, a three-member international arbitration tribunal had ruled that the Indian government had violated the “guarantee of fair and equitable treatment”, going against the bilateral treaty between India and the United Kingdom. The breach had resulted in losses for the Scottish oil company.
The tribunal had then ordered India to pay $1.2 billion (over Rs 8,715 crore) in damages along with other costs to Cairn Energy.
Cairn Energy had moved courts in nine countries to enforce its $1.4 billion (Rs 10,247 crore) arbitration award against India. This has been recognised and confirmed by five courts in the United States, the United Kingdom, the Netherlands, Canada and France.
Due to the recognition of the tax dispute by the courts, Cairn Energy was able to petition for seizing any Indian government asset such as bank accounts, payments to state-owned entities, airplanes and ships, to recover the amount.
After seizing the properties in Paris, Cairn Energy said that it still preferred to reach an agreement with the Indian government to close the matter. The company added that it had submitted a detailed list of proposals to New Delhi since February.
“However, in the absence of such a settlement, Cairn must take all necessary legal actions to protect the interests of its international stakeholders,” the oil company told the Financial Times.
The oil company said the freeze on assets was a “necessary preparatory step to taking ownership of the properties and ensures that the proceeds of any sales would be due to Cairn”, the Financial Times reported.
India’s Ministry of Finance on Thursday said the government was trying to ascertain the facts in the case 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 Indian government also noted the application it had filed on March 22 to set aside the December 2020 international arbitral award in The Hague Court of Appeal. The Indian government had filed the appeal as Cairn Energy began to recover the damages, including hiring a team of asset recovery experts.
“Government of India will vigorously defend its case in Set Aside proceedings at The Hague,” the Centre said on Thursday. “It is also stated that the CEO [Chief Executive Officer] and the 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.”
Experts told the Financial Times that if India was reluctant to pay the money ordered by the international tribunal, it would be seen as an acknowledgement of wrongdoing.
Earlier, Cairn said the money ultimately belongs to its shareholders, which include large investors such as BlackRock, Fidelity and Franklin Templeton. The ramifications of India not honouring the award will “run across the international investment community more widely”, it had said.