Cairn moves courts in US, UK to get $1.4 bn from India
NEW DELHI: Britain’s Cairn Energy plc has filed cases in the US, the UK and the Netherlands courts to register a $1.4 billion arbitration award it had won in a tax dispute against India, as a preparatory action in case it is not paid by the Indian government.
Cairn filed a petition in a Washington DC Federal court on February 12, and followed it up with similar filings in the UK and the Netherlands courts, people with knowledge of the matter said.
In a petition, Cairn Energy plc and its UK holding company sought the US district court for the District of Columbia to recognise and confirm the December 21 award by a three-member tribunal at the Permanent Court of Arbitration at The Hague.
It also plans to move a Canadian court soon.
The people said the petitions are primarily to register the December 21 award with the courts prior to taking any enforcement actions such as seeking seizure of Indian assets in those countries to enforce the award in case it is not paid.
No enforcement action is planned for now and the company is waiting for a formal response from the Indian government on honouring the award, they said.
The company declined comments on the issue.
Cairn’s hands have been forced by its shareholders who after waiting patiently for seven years for resolution of the tax issue, now want action to recover the award. The shareholders include big financial institutions such as BlackRock, Fidelity, Franklin Templeton, Schroders and Aviva.
Rather than sit and wait for the government response, Cairn has moved to cover for all eventualities, the people said.
Registration of an arbitration award is the first step before any entity can file a petition in court for seizure of any asset to recover the amounts awarded.
Cairn chief executive Simon Thomson has sought a meeting with finance minister Nirmala Sitharaman this week to discuss the arbitration award. While Sitharaman hasn’t responded to the request, Finance Secretary Ajay Bhushan Pandey is likely to meet him.
Last month, the Edinburgbased firm had written to the government saying it would be forced to seize Indian government assets if New Delhi fails to pay it $1.4 billion after losing a bitter dispute over retrospective taxes.