Tribunal judiciaire de Paris’s ruling based on Cairn Energy’s application will impact some 20 properties, valued at more than 20 million euros (Rs 177 crore), as part of a guarantee of the debt owed to the British company that exited India a few years ago. Some of the properties are in the 16th Arrondissement of Paris, which is one of the wealthiest areas in the city.
“This is the necessary preparatory step to taking ownership of the properties and ensures that the proceeds of any sales would be due to Cairn,” said a source familiar with the proceedings.
The action in France is part of Cairn’s enforcement strategy of pushing the government to withdraw its appeal against an international tribunal’s award in the retrospective taxation case. The arbitration tribunal had held that the government had violated provisions of an investment treaty in seeking capital gains tax from the British company.
The company — which has less than 200 employees and a market capitalisation of £755 million (under Rs 7,800 crore) — has filed cases in several countries to pursue the unpaid international arbitration award of $1.7 billion (Rs 12,750 crore).
The arbitration award has also been registered in other jurisdictions, including the US, the UK, Canada, Singapore, Mauritius, France and the Netherlands as the company intends to focus on high-value assets.
It had filed cases in the Southern District of New York, seeking judicial confirmation that Air India can be classed as the alter ego of the Indian state and thereby jointly liable for the arbitral award.
“Our strong preference remains an agreed, amicable settlement with the Government of India to draw this matter to a close, and to that end we have submitted a detailed series of proposals to them since February this year. However, in the absence of such a settlement, Cairn must take all necessary legal actions to protect the interests of its international shareholders,” said a company spokesperson.
The case is linked to the retrospective amendments to the law, allowing the government to levy capital gains tax for sale or transfer of assets located in India, a move that was piloted by Pranab Mukherjee after the government lost a case in the Supreme Court.
The Modi government has stuck to the stand and has now challenged the award arguing that bilateral investment treaties cannot override the legislature’s powers.