Cairn threatens to enforce arbitration award against India’s foreign assets

New Delhi: Cairn Energy has told India it is prepared to move towards enforcing a $1.2 billion arbitration award against India’s assets overseas, in a step to mount pressure on the government to quickly implement the judgement.
An arbitration tribunal last month ruled in favour of Cairn Energy in a six-year-old retrospective tax dispute and ordered the Indian government to pay the UK firm damages of $1.2 billion plus interest and cost.

“Now that the award has been granted, our shareholders expect early resolution, failing which they will expect Cairn to pursue the award in conformity with its right under the Treaty,” Cairn Energy wrote to the Indian high commissioner in London in a letter that has also been copied to the Prime Minister’s Office, and the ministers for finance and external affairs.

“As India is a signatory to the New York Convention, the award can be enforced against Indian assets in numerous jurisdictions around the world for which the necessary preparations have been put in place,” Cairn Energy said in the letter, seen by ET.

The company has sought “an early indication that the Centre will honour the award and implement the judgement”. It has sought clarity on this ahead of its earnings release on March 9. India had previously said it would study the award before deciding on the next course of action.