India has appealed in opposition to an order by a world tribunal to pay $1.2 billion in damages, plus different prices, to Cairn Energy in a long-running tax dispute, two sources with direct information of the matter advised Reuters. London-listed Cairn in December was awarded damages of $1.2 billion-plus curiosity and prices, taking the present complete to over $1.7 billion. India, which is now liable to make this fee, had mentioned beforehand it might problem the order.
The enchantment, filed on Monday in a Dutch court docket, comes as Cairn is pulling out all of the stops to recuperate the damages award, together with hiring a staff of asset restoration consultants. It additionally comes weeks forward of UK Prime Minister Boris Johnson’s go to to India to construct deeper enterprise ties.
India has appealed on the grounds that taxation-related issues aren’t coated in its bilateral funding treaty with the United Kingdom underneath which the case was filed, and due to this fact the arbitration tribunal doesn’t have the jurisdiction to rule on the matter, one of many sources mentioned. Cairn and India’s finance ministry didn’t reply to a request for remark.
Cairn has already filed instances in native courts within the United States, UK, France, Netherlands, Singapore and Quebec to implement the arbitration award, and there’s prone to be extra enforcement actions in different international locations, Dennis Hranitzky, head of the sovereign litigation follow at Quinn Emanuel Urquhart & Sullivan, a regulation agency representing the corporate, advised Reuters.
This basically implies that as soon as it obtains orders from the native courts, Cairn can establish and seize Indian belongings, which may embody financial institution accounts, Air India planes, and property of different Indian state-owned corporations, he mentioned.
“Cairn has appointed a team of the best asset-tracing and recovery experts in the business to collect against India,” Hranitzky mentioned, including that the corporate will do all the things it takes to recuperate the total quantity of the arbitral award if settlement discussions aren’t fruitful.
Cairn has mentioned the cash in the end belongs to its shareholders – which embody giant traders resembling BlackRock, Fidelity and Franklin Templeton, and the ramifications of India not honouring the award will “run across the international investment community more widely”.