cairn energy case: full case of cairn energy and 20 Indian government properties confiscation, at a glance, Cairn Energy gets order from French court to confiscate 20 Indian government properties
Cairn Energy and the entire case of seizure of Indian government properties, a look
- French court ruling in favor of Cairn Energy
- Instructions for seizure of 20 Indian government companies
- Freedom to collect US $ 1.7 billion in damages through 20 government assets
New Delhi. Britain’s Cairn Energy has secured an arbitration order from a French court to confiscate 20 Indian government assets in France to recover damages of USD 1.7 billion. A French court on June 11 ordered Cairn Energy to acquire Indian government properties, mostly flats, and the legal process in this regard was completed on Wednesday evening.
Properties mostly flat
Three people directly involved in the case said most of these properties are flats, valued at more than 20 million euros, and are used by the Indian government in France. The French court tribunal Judissier de Paris on June 11 The decision was passed on Cairn’s application (through judicial mortgage) to confiscate the Indian government-owned residential real estate located in central Paris. The legal formalities for this were completed on Wednesday evening, sources said. Cairn is unlikely to evict Indian officials living in these properties, but the government cannot sell them after a court order.
French court order not received
Meanwhile, the Finance Ministry said that it has not received any order from any French court and appropriate legal action would be taken after receiving the order. A Cairn spokesperson said, “Our priority is to reach an amicable settlement agreed with the Indian government to end this matter, and for that we have submitted a wide range of proposals since February this year. “In the absence of an agreement, Cairn will take all necessary legal action to protect the interests of its international shareholders,” the spokesperson added. An arbitration court in December ordered the Indian government to pay Cairn Energy more than $1.2 billion in interest and fines.
what is the whole matter
The Government of India did not accept this order, after which Cairn Energy appealed in several courts abroad to recover the amount due by confiscation of the assets of the Government of India. A three-member international tribunal unanimously decided on Cairn India in December last year. The tax demand of the government was rejected from the previous date. The tribunal also included a judge appointed by India. The tribunal had directed the government to refund the shares sold by it, forfeited dividend and tax refund.
Despite being involved in the arbitration process for four years, the Indian government did not accept the decision and challenged it in the court of the Netherlands, the seat of the tribunal. Earlier, Cairn Energy filed the case in the US District Court for the Southern District of New York. I had said that Air India is controlled by the Government of India. In such a situation, the court should put the onus on the airline company to fulfill the award of the tribunal.
Dennis Hernitzky, Head of Sovereign Litigation Practice, Quinn Emmanuel Urquhart & Sullivan, the law firm representing the company, said: “There are a number of PSUs on which we are considering promoter action. Enforcement action will be quick and it may not happen in the US.” Following pressure from its shareholders, Cairn is trying to recover the amount by confiscation of public sector companies and bank accounts abroad. The order affects around 20 properties belonging to the Government of India for recovery of outstanding debt on Cairn.
“This is a necessary preliminary step to get ownership of the properties and ensure that only Cairn will be able to sell them,” said a person familiar with the matter. Cairn Energy had earlier said that it had approached the Indian government. Indian assets worth about $70 billion have been identified abroad to recover $1.72 billion. Earlier, countries like Pakistan and Venezuela have faced similar action for not complying with the arbitration court’s decision.
Indian government will challenge
A source said that the Indian government would naturally challenge such a seizure but it would have to keep an amount equivalent to the property as a bank guarantee to protect its assets. If Cairn’s case is not considered in the court, then the Government of India will get this guarantee back and if the court says that the Government of India has not been able to fulfill its obligation, then the guarantee amount will be handed over to Cairn.
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