Cairn Energy said that it has effectively frozen Indian state-owned properties in Paris, escalating the fight between the oil producer and the Indian government over an arbitration award. The company said it will transfer the ownership of 20 properties owned by the Indian government valued at more than 20 million euros. A French court has authorised the freeze.
This move comes as Cairn tries to force the Indian government to pay $1.7 billion awarded over a tax dispute by an international tribunal. Cairn was awarded the sum last year that came at the end of a long-running arbitration.
According to a report in Financial Times, Cairn said that it has identified $70 billion of assets across the globe that it might try to seize if the government does not pay up. These assets include buildings as well as Air India aircraft.
However, its asset freeze application in Paris is the first one to fructify.
The oil group said that the freeze on the properties was approved by the French Court, Tribunal Judiciaire de Paris. Cairn Energy called it a ‘necessary preparatory step to taking ownership of the properties and ensures that the proceeds of any sales would be due to Cairn’.
India had retroactively sought $1.4 billion in tax payments from Cairn Energy in connection with the group’s floatation of its Indian subsidiary on the BSE in 2007 under a law passed in 2012. A Dutch arbitration tribunal found that India had violated its obligations under the UK-India Bilateral Investment Treaty in 2014 when tax officials seized Cairn Energy’s 10 per cent stake in the subsidiary that it sold to Vedanta.
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