French Court permits Cairn Energy to seize 20 Indian govt assets in France

A French court on Wednesday permitted Scottish oil producer Cairn Energy to seize about 20 Indian government properties in France, PTI reports. The properties will compensate and help Cairn recover a part of $1.7 billion arbitration, awarded by an international tribunal over a tax dispute. 

Meanwhile, Ministry of Finance refuted the report and said, “There have been news reports that Cairn Energy has seized/frozen State-owned property of the Government of India in Paris. However, Govt of India has not received any notice, order, or communication, in this regard, from any French Court.”

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An arbitration panel had in December ordered the Indian government to return $1.2 billion plus interest and penalty to Cairn Energy after reversing a retrospective tax demand. However, with the reluctance of the Indian government, the oil producer had moved in multiple jurisdictions overseas to recover the amount due by seizing Indian government assets.

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 “On June 11, the French court had ordered Cairn Energy’s take-over of Indian government properties, mostly comprising flat; and the legal process got completed on Wednesday evening,” PTI reported.

Cairn Energy said that it would effectively transfer the ownership of 20 properties of the government, valued at more than €20 million, the Financial Times quoted a report.  

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“Where I find arbitration award questioning India’s sovereign authority to tax… if there is a question about the sovereign right to tax, I will appeal, it’s my duty to appeal,” India’s finance minister Nirmala Sitharaman said earlier.

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“The arbitration is now finalised and the award has been given. We would request along with the others the Indian government move swiftly to adhere to the award that has been given. That is important. It is important for our shareholders who are global financial institutions and who want to see a positive investment climate in India,” said Simon Thomson, chief executive officer, Cairn Energy had said.