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By Aditi Shah and Aftab Ahmed
NEW DELHI, March 24 (Reuters) - India has appealed against
an order by an international tribunal to pay $1.2 billion in
damages, plus other costs, to Cairn Energy in a
long-running tax dispute, two sources with direct knowledge of
the matter told Reuters.
London-listed Cairn in December was awarded damages of $1.2
billion plus interest and costs, taking the current total to
over $1.7 billion.
India, which is now liable to make this payment, had said
previously it would challenge the order.
The appeal, filed on Monday in a Dutch court, comes as Cairn
is pulling out all the stops to recover the damages award,
including hiring a team of asset recovery experts.
It also comes weeks ahead of UK Prime Minister Boris
Johnson's visit to India to build deeper business ties.
India has appealed on the grounds that taxation-related
matters are not covered in its bilateral investment treaty with
the United Kingdom under which the case was filed, and therefore
the arbitration tribunal does not have the jurisdiction to rule
on the matter, one of the sources said.
Cairn and India's finance ministry did not respond to a
request for comment.
Cairn has already filed cases in local courts in the United
States, UK, France, Netherlands, Singapore and Quebec to enforce
the arbitration award, and there is likely to be more
enforcement actions in other countries, Dennis Hranitzky, head
of the sovereign litigation practice at Quinn Emanuel Urquhart &
Sullivan, a law firm representing the company, told Reuters.
This essentially means that once it obtains orders from the
local courts, Cairn can identify and seize Indian assets, which
could include bank accounts, Air India planes and property of
other Indian state-owned companies, he said.
"Cairn has appointed a team of the best asset-tracing and
recovery experts in the business to collect against India,"
Hranitzky said, adding that the company will do everything it
takes to recover the full amount of the arbitral award if
settlement discussions are not fruitful.
Cairn has said the money ultimately belongs to its
shareholders - which include large investors such as BlackRock
, Fidelity and Franklin Templeton, and the ramifications
of India not honouring the award will "run across the
international investment community more widely".
(Reporting by Aditi Shah. Editing by Mark Potter)
