By -: Keshav Kaushik
Cairn Energy Plc, a UK-based company, sent a letter to India’s High Commission, threatening that it may be compelled to seize Indian assets present abroad if India doesn’t discuss repaying the $1.2 billion in damages in the retrospective case it lost last month in International Arbitration Court in Hague. The president of the company has asserted that ‘necessary arrangements have already been made’ and they are ready to begin attaching Indian assets anytime.
In the list of the assets that may be seized, Embassy-owned bank accounts, Airplanes owned by Air India Airlines, and ships owned by the state in various places like Holland, U.K, France, Canada, etc. Cairn leadership has also commented that the Government of India has stated that they would respect the legal process and it [Cairn] expects them [Indian Government] to honor that promise.
This issue was supposed to be brought up during the pre-scheduled visit of U. K’s Prime Minister Boris Johnson but the visit was put on hold due to coronavirus pandemic. Though the Indian Prime Minister and then Prime Minister of U.K Theresa May discussed this issue when the former visited London in April 2018. Cairn Officials too have often met the Indian High Commissioner to U.K Gaitri Issar in this regard. The officials stated that the Indian Government has promised to respect the outcome of the case. “The money disputed and now adjudicated in the arbitration ultimately belongs to Cairn’s shareholders so the ramifications of the award and India’s honoring of it, go well beyond Cairn can itself, and run across the international investment community more widely”, said a Cairn Official.
During 2006-07, Cairn transferred its Cairn India Holdings to Cairn India, during this time period Income Tax slapped a tax of 2000 crore on it and owing to the difference in interpretation of the meaning of capital gain, Cairn refused to pay the amount. Income Tax department then filed multiple lawsuits against it, which compelled it to go to International Arbitration Court in Hague where Cairn won the case and India was asked to pay Rs.8040 Crore as damages to the company.