French court allows Cairn to seize 20 Indian govt properties in Paris

Assets are worth more than 20 million euros; FinMIn says no communication received in the matter Cairn is also eyeing assets in US, UK, Canada, Singapore, Mauritius and Holland

Armed with a judicial order upholding its case, London-listed Cairn Energy PLC has identified high-value assets of the Indian government in the US, the UK, Canada, Singapore, Mauritius, France, and the Netherlands for enforcing an arbitration award that went against India.

Cairn has got a favourable order from a French tribunal for seizing 20 properties -- valued at more than 20 million euros -- of the Indian government in that country.

The Union government will contest the French court order.

Tribunal judiciaire de Paris ordered freezing (through judicial mortgages) residential real estate owned by the government in central Paris. A company spokesperson said the court order affected some 20 centrally located properties belonging to the government and valued at more than 20 million euros, as part of a guarantee of the debt owed to Cairn Energy PLC.

“This is the necessary preparatory step to taking ownership of the properties and ensuring that the proceeds of any sales would be due to Cairn,” said the spokesperson.

One of the properties is believed to be India House, which houses Indian students.

A person close to the development said the government owned properties in France but these were not commercial government properties and would, therefore, fall under the New York Convention, under which properties owned by foreign governments could not be seized.

French jurisdiction, however, allows ex-parte orders, which means that a decree can be given without hearing the other side. The Union ministry of finance, on its part, said it did not receive any notice, order, or communication in this regard from any French court.

“The government is trying to ascertain the facts, and whenever such an order is received, appropriate legal remedies will be taken, in consultation with its counsels, to protect the interests of India,” the finance ministry said in an official statement.

The company has sought a meeting with the finance minister to resolve the arbitration issue despite its hard stand and move to enforce the arbitration award.

“Cairn has again reached out to the Indian government for a meeting with the finance minister. They are yet to get a time. The government expects Cairn to come up with an offer on the lines acceptable to India, as discussed with them in earlier meetings,” said a government official.

The government filed an application on March 22, 2021, to set aside the December 2020 international arbitral award at The Hague Court of Appeal. “Government of India will vigorously defend its case in Set Aside proceedings at The Hague,” said the finance ministry statement. India’s hearing of the appeal filed against the $1.2 billion award at The Hague is listed for September 24.

The company last month filed a petition with the courts in the Southern District of New York, seeking judicial confirmation that Air India, the national carrier, could be classed as “the alter ego of the Indian state”, and thereby jointly liable for the arbitral award.

Cairn registered the arbitration award in many jurisdictions, including the US, the UK, Canada, Singapore, Mauritius, France and the Netherlands, said the company spokesperson.

He said action in France was the latest step in Cairn’s enforcement strategy of pursuing the government across multiple jurisdictions for its unpaid international arbitration award.

“Our strong preference remains an agreed, amicable settlement with the Government of India to draw this matter to a close, and to that end we have submitted a detailed series of proposals to them since February this year. However, in the absence of such a settlement, Cairn must take all necessary legal actions to protect the interests of its international shareholders,” said the spokesperson.