The firm has moved courts in the US, the UK, Canada, France, Singapore, the Netherlands and three other countries to register the December 2020 arbitration tribunal ruling that overturned the Indian government’s ₹10,247 crore demand in back taxes and ordered New Delhi to return $1.2 billion 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 honour 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, said.
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… 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.
The lawsuit will be similar to the one brought by Crystallex International Corp to attach property of Petroleos de Venezuela, S.A, the state-owned oil company of Venezuela, in Delaware couple of years back after the Latin American country failed to pay the firm USD 1.2 billion that an arbitration tribunal had ordered to pay in lieu of the 2011 seizing gold deposits held and developed by the firm.
“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 $1.2 billion plus interest and cost that the arbitration tribunal had ordered.