Wednesday, September 08, 2021

Cairn pursues seizure of Air India's assets

Mumbai/New Delhi: Notwithstanding the Government’s offer to scrap the retrospective tax demand on Cairn Energy, the Scottish firm is continuing to pursue the seizure of assets belonging to Air India in a bid to enforce the arbitration award.

Cairn Energy has submitted a response to Air India’s letter in the United States District Court in the Southern District of New York stating that it intends to ensure that the award is enforced.

“Air India notably does not deny that it is India’s alter ego. It instead makes legal arguments that the Second Circuit and Air India’s own cases reject. Air India asserts that this case is not ripe and that Cairn must confirm its award against India first before suing Air India under an alter ego theory. But Air India fails to cite a single case supporting this theory,” Cairn Energy’s legal counsel said in a court filing dated September 2, seen by BusinessLine.

On August 23, Air India had sent a letter to the court asking for Cairn Energy’s claims to be dismissed.

In response to Air India’s letter, Cairn’s legal counsel said, “Cairn separately intends to cross-move to enforce Cairn’s arbitral award against Air India or, in the alternative, for an order requiring Air India to “give suitable security” in an amount equal to the entire judgment sought pursuant to Article VI of the Convention for the Enforcement and Recognition of Foreign Arbitral Awards,” it added.

The award was issued on December 21, 2020, by a tribunal in the Netherlands, based on its finding that India’s retroactive amendment to its taxation laws breached its obligation under the Agreement between the UK and India for the Promotion and Protection of Investment. The tribunal rendered an award in Cairn’s favour for $1.2 billion.

08/09/21 Richa Mishra/Ayushi Kar/Business Line

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