Cairn to file lawsuits in US to seize Indian assets
THE UK's Cairn Energy Plc plans to bring lawsuits in the US and other countries to pierce the corporate veil between the Indian government and its owned companies such as in oil and gas, shipping, airline and banking sectors, to seize their overseas assets to recover $1.2bn ordered by an international arbitration tribunal.
The firm has moved courts in the US, UK, Canada, France, Singapore, the Netherlands and three other countries to register the December 2020 arbitration tribunal ruling that overturned the Indian government's $1.41bn demand in back taxes and ordered New Delhi to return $1.2bn in value of shares it had sold, dividends seized and tax refunds withheld to recover the tax demand.
With the government so far refusing to honor the arbitration award and instead choosing to challenge it, Cairn is looking to enforce it by seizing overseas Indian assets, Dennis Hranitzky, head of the sovereign litigation practice at Quinn Emanuel Urquhart & Sullivan, a law firm representing the company.
These assets can potentially be non-diplomatic ones and those owned by entities or companies controlled by the Indian government in those nine countries.
‘Cairn plans to bring lawsuits in the coming weeks to pierce the corporate veil to establish that (certain) state-owned entities are India's alter ego under Bancec' for enforcing the arbitration award, he said.
The Bancec guidelines deal with determining when a judgment against a foreign state is enforceable against its agencies.
‘Indian assets across several jurisdictions have been identified that Cairn will be seeking to seize to enforce the award,' he said, refusing to name the assets the firm may be looking to attach to recover the $1.2bn plus interest and cost that the arbitration tribunal had ordered.
‘Until we have commenced proceedings to seize the assets, this information is proprietary,' he said.
Cairn is pulling out all stops to recover the damages award, including hiring a team of asset recovery experts.
Sources said the assets that can be attached could range from airplanes to ships, to oil and gas cargoes and bank accounts of state-owned entities.
‘Cairn is moving forward with its enforcement plans with all deliberate speed.
The timetable for proceedings to seize assets varies from country to country,' he said without giving details.