Cairn Energy seizes Indian govt properties in France as $1.7 billion tax dispute escalates

India had seized and offered shares of Cairn in its erstwhile India unit, confiscated dividend due and withheld tax refunds to recuperate the tax demand it had levied two years after passing a regulation in 2012 that gave it powers to levy tax retrospectively. (File picture)

Scottish power big Cairn Power has seized properties owned by the Indian authorities in Paris, the Monetary Occasions reported on Thursday. The oil producer and the Indian authorities have been at loggerheads for months after an arbitration tribunal dominated in favour of Cairn and requested the Indian authorities to pay $1.7 billion over a tax dispute. A 3-member worldwide arbitration tribunal, final yr, had unanimously overturned levy of taxes on Cairn retrospectively and ordered refund of shares offered, dividends confiscated and tax refunds withheld to recuperate such demand.

FT reported that Cairn Power would switch possession of 20 properties valued at over €20 million. A French courtroom had authorised the freeze, based on the report. Nonetheless, official sources have denied the declare. “There have been information stories that Cairn Power has seized State-owned property of Authorities of India in Paris. Nonetheless, the federal government of India has not acquired any discover, order or communication, on this regard, from any French Court docket,” they stated. Officers stated that the Indian authorities is making an attempt to establish the details of the matter, and plans to take applicable authorized treatments each time such an order is acquired.

Cairn Power had earlier stated it has recognized $70 billion of Indian property abroad for potential seizure to gather the arbitration award, together with pursuits and penalty. Reviews recommend that property recognized by Cairn Power vary from Air India’s planes to vessels belonging to the Shipping Corporation of India. 

In Might, Cairn Power had filed a lawsuit within the US pleading that Air India is managed by the Indian authorities a lot that they’re ‘alter egos’ and the airline ought to be held chargeable for the arbitration award. The nationwide provider has until mid-July problem the lawsuit filed by Cairn Power.

Months after the arbitration ruling, the Indian Authorities has nonetheless not accepted the award. The federal government has already filed an utility to put aside the December 2020 worldwide arbitral award in The Hague Court docket of Enchantment.

The tribunal had ordered the Indian authorities to return the worth of shares that have been offered, dividends seized and tax refunds withheld to recuperate the tax demand. The order additionally requested the Indian authorities to compensate Cairn Power “for the whole hurt suffered” along with curiosity and value of arbitration. Earlier in September final yr, UK’s Vodafone Group had additionally received a world arbitration towards the demand of Rs 22,100 crore in taxes.