Cairn Energy Plc., the LSE-listed leading European oil and gas exploration and development company headquartered on Edinburgh, UK, had filed a lawsuit against India’s flagship carrier Air India in a bid to effectuate a $1.2 billion arbitration award which it had won on last December over a retrospective tax dispute against India, potentially jeopardizing an Indian Government move to privatize the money-draining company’s assets, a US District Court filing had unveiled on Saturday.
In point of fact, the latest Cairn lawsuit against Air India to enforce a $1.2 billion arbitration award, which was filed on Friday in a US District Court for the Southern District of New York, followed an arbitration tribunal decision in December last year which had awarded the British firm a stark upsum of $1.2 billion plus interests, ratcheting up pressure on Indian Government to lay off the total.
On top of that, arguing that Air India, a state-owned company, ought to be contemplated as “legally indistinct from the state itself,” the court filings said, “The nominal distinction between India and Air India is illusory and serves only to aid India in improperly shielding its assets from creditors like (Cairn),” as little developments were made over recent round of talks between Air India and Cairn to resolve the tax dispute.
Cairn sues Air India over $1.2 billion arbitration award
Nonetheless, a Senior Government official in India was quoted saying following the lawsuit that neither the Government, nor Air India had received any kind of formal notice adding, “As and when any such notice is received.
The government or concerned organisation shall take all necessary steps to defend against any such illegal enforcement action. ” Meanwhile, the Government official had added that New Delhi had already lodged an appeal against the arbitration award, though it remained utterly unclear on whether the Indian Government could rescue it from the imminent threat imposed by the British company, as Cairn had stepped up efforts since January this year to identify Indian assets overseas which it could snap up including aircrafts, ships and bank accounts.