Wednesday, January 27, 2021

Cairn threatens to seize Indian assets overseas to collect $1.4 billion arbitration award

Just like US oil firm ConocoPhillips grabbed Venezuelan assets overseas to enforce an arbitration award, Indian bank accounts, airplanes and other foreign properties can be seized to collect USD 1.4 billion awarded to UK's Cairn Energy against Indian retro tax, according to a letter seen by PTI.

The British firm has begun identifying overseas Indian assets in case the Indian government fails to honour the arbitration award.

Cairn CEO Simon Thomson in the January 22 letter to Indian High Commissioner in London, with copies marked to Prime Minister''s Office, Finance Minister Nirmala Sitharaman and External Affairs Minister S Jaishankar, the arbitration award is "final and binding" and "the Government of India has an obligation to comply with its terms."

"As India is a signatory to the New York Convention, the award can be enforced against Indian assets in numerous jurisdictions around the world for which the necessary preparations have been put in place," he wrote.

In 2019, ConocoPhillips had moved US courts to seize Venezuelan state oil company PDVSA''s assets to collect USD 2 billion compensation it had won in an arbitration against Venezuela''s 2007 takeover of its assets.

Cairn has hired an agency to identify bank accounts and other assets, including potentially Air India planes and even Indian ships, that could be seized in case India fails to comply. Diplomatic properties however cannot be touched.

26/01/21 PTI/Business Today

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