Cairn Energy Plc UK plans to take legal action in the US and other countries to break down the corporate scene between the Indian government and its property companies in the oil and gas, shipping, air and domestic sectors. banking, to seize their overseas assets to recover $ 1.2 billion ordered by an international settlement tribunal.
The company has moved courts in the US, UK, Canada, France, Singapore, the Netherlands and three other countries to file a December 2020 settlement tribunal ruling that challenged the Rore 10,247 claim of the Indian government in back taxes and ordered to return to New Delhi USD. 1.2 billion in the value of the shares it sold, shares seized and tax refunds held back to reclaim the tax demand.
With the government so far refusing to honor the arbitration award and instead opting to challenge it, Cairn is looking at its imposition by seizing Indian property abroad, Dennis Hranitzky, head of sovereign law practice at Quinn Emanuel Urquhart & Sullivan, a law firm representing the firm, told PTI.
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These funds can be non-diplomatic and those owned by companies or companies controlled by the Indian government in these nine countries.
“Cairn intends to file a lawsuit in the coming weeks to break the corporate screen to find out that (some) Indian state agencies are alter ego under Bancec” for the award implement conciliation, he said.
Bancec’s directives deal with determining when a judgment against a foreign state is enforced against its agencies.
The lawsuit will be similar to the one introduced by Crystallex International Corp. to link the property of Petroleos de Venezuela, SA (PDVSA), the Venezuelan oil company with the state, in Delaware a year or two ago. for the Latin American country failed to pay 1.2 million USD to the company that ordered a tribunal to pay in lieu of the 2011 gold deposits held and developed by the company.
“Indian assets across several jurisdictions have indicated that Cairn will try to take over to implement the award,” he said, refusing to name the potential assets of the company to to recoup the interest and cost of USD 1.2 billion-plus a settlement tribunal had been ordered.
Read | Cairn urges India to honor his word and pay $ 1.4 billion, shareholders seek coercion
“Until we have initiated proceedings to seize the asset, this information is proprietary,” he said.
Cairn pulls out all stops to recover the damages award, including hiring a team of asset recovery experts.
Sources said the funds that could be tied could go from planes to ships, to shipments of oil and gas and bank accounts of state-owned agencies.
“Cairn is moving forward with its enforcement plans at all deliberate speeds. The timetable for fundraising proceedings varies from country to country. Under the laws of some countries, These proceedings begin immediately, but in others we will have to wait until after the award has been recognized, “he said without giving any details.
Cairn had previously said that the money will ultimately belong to shareholders – which includes major investors such as BlackRock, Fidelity and Franklin Templeton, and India’s ramifications will not does not honor the award “running across the wider international investment community”.
Their management team has held three rounds of face-to-face conversations and one video conference with senior officials in the ministry of finance.
India has appealed against the settlement award because tax-related issues are not covered in the bilateral investment agreement with the United Kingdom under which the case was filed, and therefore the tribunal does not have the authority to rule on the case, sources said.
However, the appeal in the Dutch court does not prevent Cairn from taking action in other jurisdictions in order to receive the full settlement award amounting to USD 1.7 billion. after introducing interest and expense from December 2020.
The company will try to establish that the alter ego state-owned companies / companies of India are under Bancec rules, that is, to break the cover between the Indian government and them.
‘Scraping the corporate shirt’ is a way of taking responsibility for the cause of a basic action against a third party who would not be likely to do otherwise.
With this, Cairn will try to cut the shell to shift responsibility for a transfer of judgment against the Republic of India to a third party that is not likely to do otherwise, i.e. state-owned companies or banks.