Cairn Energy has seized several assets of the Indian government to recover its 1.8 billion arrears from India. , Bank
Cairn Energy is occupying Indian property in France, but why?
Global New News Desk –
Cairn Energy is occupying Indian property in France, but why? Air India is the property of India. Cairn Energy, a UK-based gas and energy company, has seized a number of Indian government assets to recover its 1.6 billion arrears from India.
British oil company Cairn Energy has confiscated 20 properties of the Indian government in France for non-payment of oil tax arrears. A report in the London Financial Times made such a claim. According to the report, on June 11, a French court ordered Cairn Energy to confiscate Indian government property. Cairn confiscated the property shortly after the legal process was completed on Wednesday.
Delhi also appealed
In December last year, the International Arbitration Tribunal of the Netherlands directed the Indian government to repay 162.5 million (about Rs 12,600 crore) in interest and costs to Cairn Energy in its arrears tax case. Against which Delhi also filed an appeal.
Cairn had repeatedly warned the Indian government to pay the dues as per the order of the arbitral tribunal. At the same time, the oil company said that if they did not pay their dues, Indian assets abroad would be confiscated and sold. To that end, they started identifying some properties of the Indian government.
Cairn has since filed lawsuits in the United States, Britain, Canada, France, Singapore, the Netherlands and three other countries seeking recognition of the arbitral tribunal’s ruling. Despite the arbitral tribunal’s order, the Indian government failed to pay the arrears, and this time Cairn proceeded to confiscate the Indian government’s property in that country, as ordered by the French court.
In addition to seizing 20 Indian properties in the French capital, Paris, on Thursday, Cairn has filed a lawsuit against Air India in the United States and is tracking down Indian government properties around the world.
The agency told the BBC that both sides had gone to the International Court of Arbitration against the Indian government for imposing unfairly high taxes on them. The order of the arbitral tribunal went in their favor. That is why they have started collecting arrears.
But India’s finance ministry says it has not received any such order from a French court.
Cairn – UK based multinational oil company.
Cairn Energy says that in December last year, the International Court of Arbitration in The Hague unanimously ruled in their favor that the Indian government should repay the 1.6 billion arrears. With interest to be paid.
They applied to the courts of various countries, including the United Kingdom, the United States and Singapore.
A French court has granted permission to Cairn to execute an order to seize Indian property in Paris. Cairn then told the BBC that he had seized 20 Indian properties.
David Nisbet, director of group corporate affairs at Cairn Energy, explained to the BBC that six-and-a-half months after the arbitral tribunal’s verdict, India had to make the decision because it had not settled its arrears.
Mr. “Six-and-a-half months have passed since the court’s order went in our favor, with two rounds of talks in Delhi. But there has been no positive response from India as to whether they will pay the arrears,” Nisbet said.
“We must protect the rights of shareholders. International shareholders have been waiting for this for seven and a half years,” said David Nisbet.
How India Cairn Conflict Begins
The conflict between the Indian government and Cairn began about 15 years ago.
Five years ago, Cairn discovered a large oil mine in Rajasthan.
Cairn UK then transferred its shares to Cairn India in 2006-07 and in 2011
Cairn began the process of winding down the business from India and sold their company to Vedanta.
It was at that time that the Income Tax Department of India blocked this process and even then the remaining ten per cent of the shares were Vedanta
Prohibits handing over to.
What is retrospective tax system?
The retrospective tax system was introduced in 2012 and Cairn has to pay taxes according to that law.
Kunal Bose, a journalist who specializes in industry and trade, was explaining what that retrospective tax system in India really is.
In his words, “Our government introduces a system where old accounts or previous income or
Profits are also taxed at the new rate.
“This system was introduced when Pranab Mukherjee was the finance minister. But many in the government at the time did not like it.
“The tax system is one of the factors on which international investors invest in a country.
“Now if it is said that the old income or profit has to be taxed at the new rate, then naturally they
Don’t want to do business. Et
This will have a detrimental effect on any country’s investment, “said Mr Bose.
International Arbitration Court
Cairn says they have no questions about how India will handle their tax system. India in this regard
They have also accepted sovereignty.
But in this case, they want the arbitral tribunal to return the arrears with dignity – that’s what they want.
David Nisbet said, “Every country in the world where we work, it is accepted that the locals
The government has complete sovereignty over tax collection. No question is raised about this. Of India
No such question was raised in the case. ”
“But in the international arbitration tribunal we went to, India also had a representative
Did, the arbitration has been going on for about five years. The unanimous verdict went in favor of Cairn. Now India is ruling that verdict
Dignity – that’s what we want, “said David Nisbet.
What is the Indian government saying?
The Indian Ministry of Finance issued a statement on Thursday following the news of the seizure of Indian property in Paris.
They said, “We have not received any notice, instruction or letter from any court in France
Didn’t get it. India has appealed against the International Arbitration Court’s order on December 22.
The finance ministry has also said that it will fight the legal battle in all possible ways.
However, Mr. Kunal Bose said he thinks India should negotiate with Cairn to find a solution.
“I think the finance ministry should sit down with Cairn and work out a solution. There is still time.
“But if Delhi doesn’t want to do that, then Cairn will now have the assets that India has in various countries
Will target. It is clear that the Air India planes are in their head, “said Kunal Bose.
The agency makes it clear that Cairn will not stop at just occupying Indian property in Paris.
They have identified billions of dollars worth of Indian assets in various countries, including the United Kingdom and the United States, including state-owned oil and gas companies, banks, etc.