Cairn Energy gets right to seize Indian assets in tax row

UK oil firm Cairn Energy has gained the right to seize Indian state assets in France worth more than €20m (£17m) as part of a long-running tax row.

A French tribunal ordered a freeze on about 20 properties in central Paris as Cairn increases pressure on the Indian government over disputed tax claims.

Cairn said it wanted an “amicable settlement” in the $1.2bn (£870m) row.

Sources said the Indian government would seek “legal remedies” when it received notice from the French court.

Edinburgh-based oil and gas exploration firm Cairn Energy is in dispute with the Indian government over a 2014 retrospective tax bill, when the country’s tax office seized a 10% stake in Indian operations that Cairn was trying to sell.

Cairn took the issue to an international tribunal, which awarded the company $1.7bn in costs and damages in December 2020. The Indian government has appealed against this.

However, the energy firm has been identifying assets that it would seize in the absence of a settlement, including some belonging to Air India.

The award by the French court is “a necessary preparatory step to taking ownership of the properties and ensures that the proceeds of any sales would be due to Cairn”, the company said.

A Cairn Energy spokesperson said: “Our strong preference remains an agreed, amicable settlement with the government of India to draw this matter to a close, and to that end we have submitted a detailed series of proposals to them since February this year.

“However, in the absence of such a settlement, Cairn Energy must take all necessary legal actions to protect the interests of its international shareholders.”

The Indian government declined to comment, but sources said it had “not received any notice, order or communication, in this regard, from any French court”.

“We are trying to ascertain the facts, and whenever such an order is received, the government of India will take appropriate legal remedies in consultation with its counsels,” the sources said.

The sources added that the government filed an application on 22 March 22 to set aside the award by the international tribunal in The Hague Court of Appeal, adding that the government of India “will vigorously defend its case”.

The post Cairn Energy gets right to seize Indian assets in tax row appeared first on ZBC NEWS.

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