Arbitration dispute

Cairn Energy sues Air India to enforce tax verdict


A tribunal ruled in Cairn’s favour over a tax dispute

Cairn Enery, the Edinburgh oil and gas explorer, is suing India’s Air India as part of measures to settle a tax dispute with the Indian government.

The company is taking the action to enforce a $1.2 billion arbitration award that it won in December, according to a US District Court filing seen by the Reuters news agency.

A tribunal ruled that India breached an investment treaty with Britain and said New Delhi was liable to pay.

Cairn filed the lawsuit on Friday in the US District Court for the Southern District of New York, seeking to make Air India liable for the judgement that was awarded to Cairn.

The lawsuit argued that the carrier as a state-owned company, is “legally indistinct from the state itself.”

The filing added: “The nominal distinction between India and Air India is illusory and serves only to aid India in improperly shielding its assets from creditors like (Cairn).”

Cairn filed a separate case in a US court in February to recognise and confirm the arbitration award, including payments due since 2014 and interest compounded semi-annually.

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