CAIRN ENERGY...

The body ruled India breached an investment treaty with Britain and said New Delhi was liable to pay.

Cairn filed the lawsuit on Friday in the US District Court for the Southern District of New York, seeking to make Air India liable for the judgment that was awarded to Cairn. The lawsuit argued that the carrier as a state-owned company, is “legally indistinct from the state itself”. “The nominal distinction between India and Air India is illusory and serves only to aid India in improperly shielding its assets from creditors like (Cairn),” the filing said.

Air India did not immediately respond to comment requests.

However, a senior government official aware of the development, on the condition of anonymity, said, “There are some news reports in the media that Cairn has initiated some action against a PSU to enforce the award. Government/ PSU have not received any such notice. As and when any such notice is received, Government/ concerned organization shall take all necessary steps to defend against any such illegal enforcement action. It may be mentioned that Government has challenged the award in the case of Cairns in the appropriate court in the Hague and the Government is confident that the award will be set aside. The Government has also engaged a counsel team which is ready to defend against any enforcement action if and when initiated by Cairn anywhere in the world.”

Cairn’s move could potentially jeopardise India’s attempts to divest the stateowned carrier this year. New Delhi said in December that it had received multiple expressions of interest after it moved to privatise the loss-making entity.

The senior government official noted New Delhi has filed an appeal against the arbitration award, and added “the government is confident that the award will be set aside”.

Cairn had since January, however, begun taking steps to identify Indian assets overseas against which it could enforce the award including bank accounts, aircraft and even ships. It had also started registering its claim against India in courts in the US, Britain, Netherlands and Canada.

Commenting on the suit, a company spokesman on Saturday said that Cairn was taking the necessary legal steps to protect shareholder interests in the absence of a resolution.

He said that “Cairn remains open to continuing constructive dialogue with the Government of India” to reach a settlement.