UK’s Cairn Energy plans to bring lawsuits in the US and other countries to pierce the corporate veil between the Indian government and its companies such as in oil and gas, shipping, airline and banking sectors, to seize their overseas assets to recover $1.2 billion ordered by an international arbitration tribunal.
The firm has moved courts in the US, UK, Canada, France, Singapore, the Netherlands and three other countries to register the December 2020 arbitration tribunal ruling that overturned the Indian government's £1.02 billion demand in back taxes and ordered New Delhi to return $1.2 billion in value of shares it had sold, dividends seized and tax refunds withheld to recover the tax demand. With the government so far refusing to honour the arbitration award and instead choosing to challenge it, Cairn is looking to enforce it by seizing overseas Indian assets, Dennis Hranitzky, head of the sovereign litigation practice at Quinn Emanuel Urquhart & Sullivan, a law firm representing the company, said.
These assets can potentially be non-diplomatic ones and those owned by entities or companies controlled by the Indian government in those nine countries. “Cairn plans to bring lawsuits in the coming weeks to pierce the corporate veil to establish that (certain) state-owned entities are India's alter ego under Bancec” for enforcing the arbitration award, he said.
The Bancec guidelines deal with determining when a judgment against a foreign state is enforceable against its agencies. The lawsuit will be similar to the one brought by Crystallex International Corp to attach property of Petroleos de Venezuela, SA (PDVSA), the state-owned oil company of Venezuela.