French court grants permission to Cairn Energy to seize 20 Indian government properties in Paris: Report

In the wake of India's prolonged refusal to abide by the arbitration award according to which India has to pay $1.2 billion in damages, plus interest and costs to Cairn Energy, A French court has reportedly granted permission to Cairn to freeze a number of India-owned assets in Paris towards the settlement of the international arbitration award.

The said order of the French court entitles Cairn to take over 20 properties of the Indian government. Following India's refusal to go by the award and its appeal against the award, Cairn had moved courts in 9 countries including the US, and the UK, for enforcement of the arbitral award.

The dispute with Cairn had begun pursuant to Indian government's demand of Rs. 10,200 crore towards capital gains tax along with interest and penalty for an asset restructuring at the Cairn's India arm in 2006, ahead of the listing of its shares in 2007.

On March 5, the Finance Minister had signaled that India would prefer an appeal against the arbitral award as according to her it was her duty to appeal in cases where the nation's sovereign authority to tax is questioned. However the arbitration tribunal had made it clear that the basis of the award was not to challenge India's sovereign right to tax.

According to the decision of the arbitration tribunal, the said award can be enforced against India's overseas properties located in over 160 countries that are signatories to the 1958 New York Convention.

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