india | IST

Cairn arbitration: Centre confirms French court order against Indian assets worth $1.7b

The government on Tuesday confirmed that a French court has ordered the freezing of certain Indian assets in Paris on a petition by Britain's Cairn Energy, which is seeking to recover USD 1.72 billion from New Delhi after winning an arbitration against retro tax.

Weeks after a Frech court ordered Cairn Energy PLC to take control of 20 Indian properties due to India's refusal to respect an arbitral award of $1.7 billion, the Indian government has apprised the parliament of the developments in the matter and steps being taken by India to defend its interest.
Minister of State for Finance Pankaj Chaudhary confirmed in the Rajya Sabha that a French court has indeed ordered the freezing of the properties to the tune of 177 crores. He said India has filed an appeal against an international arbitration tribunal overturning the levy of Rs 10,247 crore back in 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 said. While the minister did not identify the properties, had earlier this month reported that the 20-odd centrally located properties mostly comprise flats, valued at more than EUR 20 million.
The MoF also apprised the house that the Indian government had appealed against the $1.7 billion award by the arbitral tribunal on December 21, 2020.
A three-member international arbitration tribunal that consisted of one judge appointed by India, had in December last year unanimously overturned the levy of taxes on Cairn retrospectively and ordered refund of shares sold, dividend confiscated and tax refunds withheld to recover 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 said.
The government has not accepted the award and has filed a 'setting aside' petition in a court in 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 said.
He also said that an international legal firm has been engaged to handle the case and defend India's interests.
"In consultation with its counsel team, the Government is taking all appropriate legal steps to protect its interest," he said without giving details.
With inputs from PTI