The authorities on Tuesday confirmed {that a} French court docket has ordered the freezing of sure Indian belongings in Paris on a petition by Britain’s Cairn Energy, which is looking for to get better USD 1.72 billion from New Delhi after successful an arbitration towards retro tax.
Minister of State for Finance Pankaj Chaudhary in a written reply to a query within the Rajya Sabha stated the federal government has filed an enchantment towards a global arbitration tribunal overturning levy of Rs 10,247 crore in again taxes on Cairn Energy.
“Yes sir, an order has been passed by a French Court freezing certain Indian government properties in the case pertaining to Cairn Energy,” he stated.
While the minister didn’t determine the properties, PTI had earlier this month reported that the 20-odd centrally positioned properties principally comprise flats, valued at greater than EUR 20 million.
The French court docket, Tribunal Judiciaire de Paris, on June 11 agreed to Cairn’s utility to freeze (by way of judicial mortgages) residential actual property owned by the Government of India in central Paris. The authorized formalities for a similar have been accomplished earlier this month.
A 3-member worldwide arbitration tribunal that consisted of 1 choose appointed by India, had in December final 12 months unanimously overturned the levy of taxes on Cairn retrospectively and ordered refund of shares bought, dividend confiscated and tax refunds withheld to get better such demand.
“Arbitral tribunal (which had its seat in The Hague) pronounced its award on 21st December 2020 in favour of Cairn Energy Plc and Cairn UK Holdings Ltd (CUHL),” Chaudhary stated.
The authorities has not accepted the award and has filed a ‘setting aside’ petition in a court docket within the Netherlands – the seat of the arbitration.
“Appeal against the said award has been filed in the Hague Court of Appeal on March 22, 2021,” he stated.
On motion initiated to guard the curiosity of the nation, he stated a global regulation agency, with related expertise, has been engaged for dealing with enforcement proceedings.
“In consultation with its counsel team, the Government is taking all appropriate legal steps to protect its interest,” he stated with out giving particulars.
With its shareholders – who embrace the biggies of the worldwide monetary world – egging it to get the cash again, Cairn has bought the arbitration award registered in international locations such because the US, the UK, Canada, Singapore, Mauritius, France and the Netherlands. It has since began looking for enforcement motion.
It has recognized USD 70 billion of Indian belongings abroad for the potential seizure to gather the award, which now totals to USD 1.72 billion after together with curiosity and penalty.
Last month, Cairn introduced a lawsuit within the US District Court for the Southern District of New York pleading that Air India is managed by the Indian authorities a lot that they’re ‘alter egos’ and the airline needs to be held accountable for the arbitration award.
Similar lawsuits are more likely to be introduced in different international locations, primarily with high-value belongings.
The Scottish agency invested within the oil and fuel sector in India in 1994 and a decade later it made an enormous oil discovery in Rajasthan. In 2006 it listed its Indian belongings on the BSE. Five years after that the federal government handed retroactive tax regulation and billed Cairn Rs 10,247 crore plus curiosity and penalty for the reorganisation tied to the flotation.
The authorities then expropriated and liquidated Cairn’s remaining shares within the Indian entity, seized dividends and withheld tax refunds to get better part of the demand.
Cairn challenged the transfer earlier than an arbitration tribunal in The Hague, which in December awarded it USD 1.2 billion (over Rs 8,800 crore) plus prices and curiosity, which totals USD 1.725 million (Rs 12,600 crore) as of December 2020.