Cairn Energy sues Air India over $ 1.2bn joint venture
The Scottish Electricity Company has set up a tribunal to allow Air India state aircraft to receive a tax dispute with Narendra Modi.
Cairn Energy is vying with Air India in the US for a $ 1.2bn plus interest rate – now more than $ 1.7bn – in one of the disputes between Western and New Delhi companies.
The case, which was filed in southern New York on Friday, seeks to prove that Air India is “transforming the Republic of India and that is why both are at risk of all debt and what India should do”.
It is a legitimate way for Cairn Energy to attempt to seize aircraft and other goods as part of a long-running tax dispute, even though negotiations to settle the case continue.
The Edinburgh company has secured $ 70bn of Indian goods worldwide with potential, including London.
If the New York case confirms that Air India’s assets are disclosed in the dispute, Cairn Energy believes it should set a precedent for other government matters. New York legal proceedings are what the company is trying to do because of its actions in resolving such international disputes.
UK Prime Minister Boris Johnson is being pressured by the anti-Labor party to defend Cairn Energy and other anti-India companies.
Workers say Johnson is keeping quiet because he wants to do business with Modi. A Conservative official said he did not think Johnson had raised the issue of Cairn Energy in a video conference with Modi this month.
Johnson agreed in calling the video with Modi an “ongoing trade agreement” – both parties said they wanted a free trade agreement that could remove barriers to trade and finance.
But some Western companies say the Modi government is failing to meet its already existing agreement. Vodafone, one of Britain’s largest companies, is embroiled in a bitter dispute with India’s tax authorities, demanding € 3bn in refunds. The International Criminal Court ruled in favor of Vodafone, but New Delhi appealed the decision.
Devas, a video production company based in India and the US, was also involved in a legal dispute with Indian officials.
“We cannot be in a position where Boris Johnson is failing to stand up for British corporations simply in the belief that they could improve the future relationship with India,” said Emily Thornberry, a business spokeswoman.
The UK government said it expected a “recent election” between Cairn Energy and the Indian government but “has not commented on non-party cases”. He was a volunteer to help UK companies who want to invest in India.
The international court in December ruled India to pay Cairn $ 1.2bn in connection with a dispute over restitution taxes New Delhi sought to compensate the company. The Modi government has denied the allegations.
India’s finance ministry has not responded to a call for comment, although local journalists have named an unnamed official for the government to take action.
Under a law enacted in 2012, India also demanded $ 1.4bn in taxes from Cairn Energy on how the UK company relocated its Indian company to the Bombay Stock Exchange in 2007.
A court of law found that India violated the rules under the UK-India Investment Agreement in 2014 when tax officials confiscated one-tenth of Cairn Energy at a lower price, which it sold in Vedanta.
Nirmala Sitharaman, India’s finance minister, last month overturned a court ruling.
Speaking of event led by the Financial Times and Indian Express, he said: “International attempts to undermine India’s tax freedom are complex, and we are concerned that this will not happen.”
Cairn Energy said it was “taking necessary steps to protect the interests of shareholders in the absence of an arbitral award.”