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Cairn gets French court order to seize 20 Indian properties in Paris

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Cairn gets French court order to seize 20 Indian properties in Paris
Image Source : PTI

Cairn gets French court order to seize 20 Indian properties in Paris

In a setback to India, Britain”s Cairn Energy Plc has secured a French court order to seize some 20 authorities properties in Paris to recuperate part of the USD 1.7 billion due from New Delhi following an arbitration panel overturning levy of retrospective taxes.

The centrally situated properties principally comprise of flats, valued at greater than EUR 20 million, had been utilized by Indian authorities institution in France, three individuals with direct data of the matter mentioned.

The French court, Tribunal judiciaire de Paris, on June 11 agreed to Cairn”s utility to freeze (by judicial mortgages) residential actual property owned by the Government of India in central Paris, they mentioned including the authorized formalities for a similar was accomplished on Wednesday night.

While Cairn is unlikely to evict the Indian officers residing in these properties, the federal government can not promote them after the court order.

A 3-member worldwide arbitration tribunal that consisted of 1 decide appointed by India, had in December final 12 months unanimously overturned levy of taxes on Cairn retrospectively and ordered refund of shares offered, dividend confiscated and tax refunds withheld to recuperate such demand.

With the Indian authorities refusing to honour the award, Cairn has moved in a number of abroad jurisdictions to implement the award by seizing Indian belongings.

Last month, Cairn introduced a lawsuit in 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 must be held responsible for the arbitration award.

Similar lawsuits are probably to be introduced in different international locations, primarily with high-value belongings. The arbitration award has been registered in international locations such because the US, UK, Canada, Singapore, Mauritius, France and the Netherlands.

Cairn has recognized USD 70 billion of Indian belongings abroad for the potential seizure to accumulate the award, which now totals to USD 1.72 billion after together with curiosity and penalty.

While the finance ministry didn’t instantly supply feedback on the matter, a Cairn spokesperson mentioned: “Our strong preference remains an agreed, amicable settlement with the Government of India to draw this matter to a close, and to that end, we have submitted a detailed series of proposals to them since February this year.”

“However, in the absence of such a settlement, Cairn must take all necessary legal actions to protect the interests of its international shareholders,” the spokesperson mentioned with out elaborating.

Sources mentioned the French court order impacts some 20 centrally situated properties, belonging to the Indian authorities, as a part of a assure of the debt owed to Cairn.

“This is the necessary preparatory step to taking ownership of the properties and ensures that the proceeds of any sales would be due to Cairn,” one of many individuals mentioned.

Last month Cairn filed a petition with the courts in the Southern District of New York, searching for judicial affirmation that Air India, the nationwide service, may be classed because the alter ego of the Indian state and thereby collectively responsible for the arbitral award.

Air India has time until mid-July to file a plea contesting the Cairn lawsuit, sources mentioned.

The Government of India, which participated in the arbitration continuing over 4 years, has not accepted the award and has filed a ”setting apart” petition in a court in the Netherlands – the seat of the arbitration.

The transfer by Cairn is analogous to a court in the British Virgin Islands ordering in December final 12 months motels in New York and Paris owned by Pakistan International Airlines to be used to settle a declare towards Pakistan’s authorities by a Canadian-Chilean copper firm.

Crystallex International Corp had introduced an analogous lawsuit to connect the property of Petroleos de Venezuela, S.A (PDVSA), the state-owned oil firm of Venezuela, in Delaware a few years again after the Latin American nation failed to pay the agency USD 1.2 billion that an arbitration tribunal had ordered to pay in lieu of the 2011 seizing gold deposits held and developed by the agency.

In 2012, Elliott Management, a buccaneering American hedge fund that held distressed Argentine bonds, seized a good-looking tall ship belonging to Argentina”s navy.

Recently, French courts dominated {that a} stifled creditor might seize a enterprise jet belonging to the federal government of Congo-Brazzaville whereas it was being serviced at a French airport, in addition to USD 30 million from a checking account of the nation’s state oil firm.

In May, the finance ministry mentioned that the tribunal “improperly exercised jurisdiction over a national tax dispute that the Republic of India never offered and/or agreed to arbitrate”.

The ministry referred to as the 2006 reorganisation of Cairn”s India enterprise for itemizing on the native bourses as “abusive tax avoidance scheme that was a gross violation of Indian tax laws, thereby depriving Cairn”s alleged investments of any protection under the India-UK bilateral investment treaty”.

The Scottish agency invested in the oil and gasoline 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.

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