RE: Been doing some reading1 Aug 2021 14:26
I agree it looks like India will loose the appeal.
Then what are their options?
1. Don't pay even after losing appeal.
I don't know the full implications of this.
I don't know if a Country can the thrown out of the International arbitration scheme for ignoring rulings? If this could happen the implications would be grave for India as being a signatory to the International Arbitration scheme is no doubt a must be for most if not all international investment in India.
If you cannot get thrown out for non-compliance then presumably Cairn will continue court action to get possession of and then sell off Indian Govenment assets throughout the World. Apart from the embarressment the ramifications of the Indian Govenment not being sure if it can retain ownership of buildings/planes/ships I presume would be massive. What about loans secured against these assets? What about the people who may live in the buildings, who's jobs are on the ships? What about businesses that may rent office space in the buildings? Basically it seems to me there would be very serious doubts about everything the Indian Government currently owns outside India. I mean, will they still own the asset next week/month??
2. Pay negotiated amount.
I think this is what the Indian Government will try to do, believe it or not. I think they KNOW they wil probably loose the appeal, but are stringing this out as long as possible. But they have a problem. Some of Cairns major share holders are truly massive international investment houses who will want the full amount. When a court orders you to pay x amount it is not subject to negotiation. Also they do not want to set a precedent. I think the best the Indian Government can hope for is a commitment from Cairn that it will invest the money in India, something they already suggested and the Indian Government rejected!!!
3. Pay the full amount ($1.7 Billion).
This might put international investors concerns at bay, but is it too late?
All the ramifications of not paying would presumably disappear.
I only see them doing this if, for instance, cairn wins the court battle in the USA about Air India assets and the planes are grounded, before being sold to repay the debt.
All IMHO.