Britain's Cairn Energy plc has filed cases in the US, the UK and the Netherlands courts to register a USD 1.4 billion arbitration award it had won in a tax dispute against India, as a preparatory action in case it is not paid by the Indian government.
Cairn filed a petition in a Washington DC Federal court on February 12, and followed it up with similar filings in the UK and the Netherlands courts, people with knowledge of the matter said.
In a petition, Cairn Energy plc and its UK holding company sought the US district court for the District of Columbia to recognise and confirm the December 21 award by a three-member tribunal at the Permanent Court of Arbitration at The Hague.
It also plans to move a Canadian court soon.
Sources said the petitions are primarily to register the December 21 award with the courts prior to taking any enforcement actions such as seeking seizure of Indian assets in those countries to enforce the award in case it is not paid.
No enforcement action is planned for now and the company is waiting for a formal response from the Indian government on honouring the award, they said.
The company declined comments on the issue.
Cairn's hands have been forced by its shareholders who after waiting patiently for seven years for resolution of the tax issue, now wants action to recover the award. The shareholders include big financial institutions such as BlackRock, Fidelity, Franklin Templeton, Schroders and Aviva.
Rather than sit and wait for the government response, Cairn has moved to cover for all eventualities, sources said.
Registration of an arbitration award is the first step before any entity can file a petition in court for seizure of any asset to recover the amounts awarded.
Cairn chief executive Simon Thomson has sought a meeting with Finance Minister Nirmala Sitharaman this week to discuss the arbitration award. While Sitharaman hasn't responded to the request, Finance Secretary Ajay Bhushan Pandey is likely to meet him.
Last month, the Edinburg-based firm had written to the government saying it would be forced to seize Indian government assets if New Delhi fails to pay it USD 1.4 billion after losing a bitter dispute over retrospective taxes.
An international tribunal had in December unanimously ruled that India violated its obligations under the UK-India Bilateral Investment Treaty in 2014, when the income tax department slapped a Rs 10,247-crore tax assessment using legislation that gave it powers to levy taxes retrospectively.
Soon after seeking Rs 10,247 crore in taxes over alleged capital gains made by the company over a 2006-07 reorganisation of India business before its listing, the tax department seized Cairn's residual 10 per cent stake in Cairn India.
In a ruling Cairn had previously described as "final and binding", the tribunal ordered New Delhi to pay USD 1.2 billion in damages, plus interest and costs, to compensate Cairn for the shares - long sold off by the tax department - as well as confiscated dividends and withheld tax refunds. This totals USD 1.4 billion.
Its shareholders have been egging the management to take action to get the money back.
But one-and-a-half-month since the 582-page judgment was issued, the government has given no indication whether it intends to honour the verdict, though payment was due immediately.
Cairn gave the country its biggest onland oil discovery in Rajasthan. It also developed the Ravva oil and gas field off the Andhra coast and smaller discoveries in Gujarat.
In the letter to the Indian government last month, Cairn had said its shareholders "expect an early resolution, failing which they will expect Cairn to pursue the award in conformity with its rights under the treaty".
"The award can be enforced against Indian assets in numerous jurisdictions around the world for which the necessary preparations have been put in place," it added.
The letter did not specify the assets that might be seized but it is widely speculated that the targets could include bank accounts as well as mobile and immobile property, including the assets of public sector enterprises such as state-owned Air India, but not diplomatic assets.
Earlier this month, Minister of State for Finance Anurag Singh Thakur had told Lok Sabha that the Cairn arbitration award was "under consideration of the government." Cairn Energy had in 2011, sold Cairn India to mining billionaire Anil Agarwal's Vedanta Group, barring a minor stake of 9.8 per cent. It wanted to sell the residual stake as well but was barred by the I-T department from doing so. The government also froze the payment of dividends by Cairn India to Cairn Energy.