Scottish airlines struggle to seize aircraft of India’s national airline

The Scottish company, which has 180 employees hijacking the national airline, seems unlikely to be a Scottish company.

But Cairn Energy is seeking authority to do just that while UK Prime Minister Boris Johnson is pledging Britain’s commitment to favor British companies in a legal saga as it seeks to reach post-Brexit trade agreements in this latest Brexit.

Cairn, which has revenues of less than $ 400 million a year, but among investors are like BlackRock and Vanguard. To sue Air India In New York against New Delhi for $ 1.2 billion plus an interest reward enforcement – $ 1.7 billion in total.

The oil and gas company Air India is trying to prove that it is an “alter ego” of the Indian government and is therefore “together”. . . Responsible for India’s debts and obligations, ”a behavior that could easily pave the way for U.S. marshals to take the carrier’s jets. He also hired lawyer Dennis Hranitzky, who helped in 2012 captured an Argentine naval vessel Ghana in Elliott Capital Management as part of a long struggle between the US hedge fund and Buenos Aires.

It was Cairn’s award made by an international tribunal In the Netherlands in December. If enforced, it could lead to a handsome return for Cairne shareholders and a conflict that has forced them to quit their activities, lay off workers and limit their investments could reinvigorate the business they have held for years.

But five months later, the government of Indian Prime Minister Narendra Modi has not shown any intention of paying.

This is one of the cases between Western companies and New Delhi. It also became Vodafone involved in a conflict With the Indian tax authorities, they demanded 3 billion euros in foreign payments.

It is a sensitive time in the UK-India relationship. The country last month He specified the “2030 roadmap” strengthening ties in areas such as trade and defense. London expects to begin negotiations for a full trade deal this autumn.

The fight is based on the 2012 law, which charged New Delhi with retrospective taxes on cross-border transactions involving India’s underlying assets.

In 2014, Cairn banned the sale of the remaining 10 per cent stake in the Cairn India subsidiary when authorities launched a tax investigation. He was slapped the following year $ 1.6 billion in tax bill.

Cairn filed a lawsuit over the UK-India bilateral investment agreement to force it to withdraw its tax claim and compensate for the economic losses. Most of the remaining shares in Cairn India, which later merged with Vedanta, were sold by the Indian tax authorities.

Johnson did not mention the conflict in a call with Modi last month. The UK line says it is not involved in investor-state legal proceedings, although those familiar with the matter have been raised in Cairn’s case by previous administrations.

“We cannot be in a situation where Boris Johnson is not advocating for the interests of British companies… In the hope of paving the way for a future trade agreement,” said Emily Thornberry, Labourd’s shadow trade secretary.

The Scottish government said it would “clearly explain Scotland’s economic and other interests to the UK government before and during a future free trade agreement with the Indian government”.

Cairn has identified $ 70 billion worth of Indian assets that could be sought around the world, and stressed that it remains “open to pursuing a constructive dialogue with the Indian government.”

International arbitration experts suggest that other Indian-owned assets, such as stocks and bank accounts, could be easier targets, and that the maneuver against Air India – which is trying to privatize the Modi government – was designed to have maximum impact.

“They are trying to reach an agreement,” an international arbitration lawyer said, noting that Cairn’s action is “aggressive”.

Satvik Varma, a New Delhi-based lawyer, said Cairn has few options because Indian courts do not accept international arbitrations granted under bilateral investment agreements. “Cairn is also accountable to its shareholders and after receiving the award it has to do everything it can to achieve enforcement,” he said.

Cairn’s top 15 shareholders said: “It’s a lot of money – at the end of the day you might have to be aggressive.”

Rasmi Ranjan Das, the deputy secretary of the finance ministry, told the Financial Times that he is still in talks with New Delhi Cairn. “The government is open to a friendly agreement” but said it should be “within the legal framework of India”. “The government’s stance is that it is a tax. . . independent function “.

Cairn said he was involved in legal proceedings over the Indian tax case. And he said that Air India was a legally independent entity, “not liable for the payment of the Cairn arbitration award or other amounts of India’s alleged debts or obligations.”

Cairn said he has “complete confidence” in his attitude.

Lawyers suggest that the next logical step is to ask Indian in New York to “stop” the Air India procedure against the Hague court process.

The tax fight has had a huge impact on Cairn when India’s retrospective law was introduced in 2012, but now the shares were worth more than £ 8. 2014 and 2020.

In the early years of the conflict, in addition to cutting staff and selling assets, observers said uncertainty about the award has limited Cairn’s ability to compete for assets. Size is becoming increasingly important for independent oil and gas companies that are in vogue with equity markets.

“Everyone knows that [London-listed] Harbor Energy and Energy and these [larger independent oil and gas companies] they will be winners because they will be big enough to care for investors, ”said Nathan Piper, an analyst at Investec.

Cairn “has been trying to get the business going since 2015… But they couldn’t go looking for it because they didn’t know if you got $ 1 billion.”