UK's Cairn Energy has identified $70 billion of Indian assets overseas for potential seizure to collect USD 1.72 billion due from the government. The move to seize stare-run assets by Cairn puts India in league with Pakistan, Venezuela and other countries which faced similar action over failure to pay arbitration awards.
Already, UK’s Cairn Energy Plc has sued India's flagship carrier Air India to enforce a $1.2 billion arbitration award that it won in a tax dispute against India, according to a US District Court filing. Once a court recognises Air India as the alter ego of the Indian government, Cairn can seek attachment or seizure of its assets in the US such as airplanes, immovable assets and bank accounts to recover the amount it was awarded by the arbitration tribunal.
What happened in the case of Pakistan, Venezuela, Argentina and Congo:
Last year in December, a court in the British Virgin Islands ordered that hotels in New York and Paris owned by Pakistan International Airlines would be used to settle a claim against Pakistan's government by a Canadian-Chilean copper company, Tethyan Copper. After this move, the Pakistan government decided to pay the bailout money.
Crystallex International Corp attached property of Petroleos de Venezuela, S.A (PDVSA), the state-owned oil company of Venezuela, in Delaware. This was after Venezuela failed to pay the firm USD 1.2 billion that an arbitration tribunal had ordered to pay in lieu of the 2011 seizing gold deposits held and developed by the firm.
Elliott Management, an American investment management firm that was founded by Paul Singer, had held distressed Argentine bonds. This bonds were brought in 2002. After the Argentine government failed to service the bonds, in 2012, the company seized a tall ship belonging to Argentina's navy.
Recently, the construction firm Commisimpex recovered $30 million from a bank account in France of Congo Republic's national oil company SNPC after a French court's ruling, stated a Reuters report.
Cairn has got an international arbitration award -- which overturned levy of retrospective taxes and ordered New Delhi to return the value of shares it had sold, dividends seized and tax refunds withheld to recover such taxes -- registered in the US, UK, France, the Netherlands, Singapore, Mauritius, Canada's Quebec province, Japan and UAE.
(With Input from Agencies)
