Cairn Energy has sued Air India for $ 1.2 billion in arbitration award

A Scottish energy company has launched a lawsuit with the aim of hijacking state-owned Air India planes as the tax dispute with the Narendra Modi government escalates.

Cairn Energy is suing U.S. India for $ 1.2 billion plus an interest reward — now worth more than $ 1.7 billion — in many disputes between Western airlines and New Delhi.

The lawsuit filed in New York’s southern district on Friday seeks to establish that Air India is “the alter ego of the Republic of India and therefore jointly and severally liable for India’s debts and obligations.”

It is a judicial process in which Cairn Energy is attempting to seize aircraft and other assets in a lengthy tax dispute, even as talks to resolve the case continue.

The Edinburgh company has identified $ 70 billion worth of active Indians around the world that could possibly be acquired, including in London.

If the New York case proves that Air India’s assets are exposed in the conflict, Cairn Energy believes it should set a precedent over other assets in the state. The legal system in New York is the focus of the company’s efforts because we are dealing with international conflicts of this kind.

UK Prime Minister Boris Johnson is under pressure from the opposition Labor Party to side with Cairn Energy and other companies in conflict with India.

Labor says Johnson is calm because he is disappointed to reach a trade deal with Modi. A Conservative official said he did not believe Johnson had raised the Cairn Energy case at this Modi video conference this month.

Johnson agreed in a video call with Modi to agree to “enhanced trade cooperation” – both sides say they are seeking a full free trade agreement that would remove barriers to trade and investment.

But some western companies say the Modi government is not complying with existing trade agreements. Vodafone, one of Britain’s largest companies, is embroiled in a complex dispute with India’s tax authorities, demanding € 3 billion in foreign payments. An international arbitration tribunal ruled in favor of Vodafone, but New Delhi appealed the decision.

India and the US satellite company Devas have also taken legal action with Indian authorities.

“We cannot be in a situation where the Boris Johnson company is not in the best interests of British companies, hoping to smooth the way for a future trade agreement with India,” said Emily Thornberry, a spokeswoman for the Thief trade.

The UK government has said it hopes to “find a resolution” with Cairn Energy and the Indian government, but has not stated that it has “taken any action” in legal proceedings. He pledged to help UK companies looking to invest in India.

In December an international tribunal ruled India paid Cairni $ 1.2 thousand in connection with the retrospective tax lawsuit, New Delhi wanted to charge the company. The Modi government has challenged the process.

The Indian Ministry of Finance has not responded to the request for comment, although local media have quoted an anonymous official as saying that the government will take all steps to defend itself.

Under a law passed in 2012, Indian backlog demanded $ 1.4 million in tax payments from Cairn Energy in connection with the 2007 listing of the UK group on its Indian subsidiary on the Bombay Stock Exchange.

An arbitration tribunal found that India had breached its obligations under the UK-India Bilateral Investment Agreement in 2014 when tax officials hijacked a 10 per cent stake in Cairn Energy’s subsidiary when it sold it to Vedanta.

Indian Finance Minister Nirmala Sitharaman backed down last month against the court ruling.

Talking an event Organized by the Financial Times and the Indian Express, he said, “International arbitrations challenging India’s sovereign tax right are worrying, and to a limited extent we are concerned that there is no wrong precedent.”

Cairn Energy said it was “taking the necessary legal steps to protect the interests of shareholders in the absence of an arbitration ruling.”