New Delhi: In response to the arbitration award of more than $1.2 billion that British oil major Cairn Energy Plc in an investment dispute against India, the government is confident to defend its case in foreign courts against the enforcement.
The government hasn't received any formal notice yet from Cairn Energy regarding the attachment of substantial Indian assets reportedly identified by the company, according to the sources cited in a report in business publication Mint.
India’s stance on defending its assets in overseas courts comes after the British company has identified $70 billion of Indian assets overseas for potential seizure to collect $1.72 billion due from the government.
What’s the Cairn Energy arbitration award?
In a preparatory action, Britain’s Cairn Energy plc has filed cases in the US, the UK, and the Netherlands courts to register a $1.4 billion arbitration award it had won in a tax dispute against India if the same is not paid by the Indian government.
In February, Cairn had filed a petition in a Washington DC Federal court and also followed it up with similar filings in the UK and the Netherlands courts, as per the news agency PTI. In the current petition, Cairn Energy plc and its UK holding company sought the US district court for the District of Columbia to recognize the December 21 award by a three-member tribunal at the Permanent Court of Arbitration at The Hague.
The company also aims to move to a Canadian court soon. Although no enforcement action is planned for now and the company is waiting for a formal response from the Indian government on honouring the award, as per the report.
In December, an international tribunal had unanimously ruled that India violated its obligations under the UK-India Bilateral Investment Treaty in 2014, when the income tax department levied a Rs 10,247-crore tax assessment using legislation that gave it powers to levy taxes retrospectively.