Business

The battle of a Scottish company to seize the planes of the national airline of India


The Scottish company, which seizes the planes of the Indian National Airline with 180 employees, may seem like an incredible scenario.

But Cairn Energy is seeking the right to do so in a recent legal reversal, which tests the willingness of British Prime Minister Boris John Onson to protect British companies before he wants to make a deal after Brexit.

Cairn, whose annual revenue is less than $ 400 million, but whose investors include the likes of BlackRock և Vanguard, suing Air India In New York, $ 1.2 billion plus $ 1.7 billion plus a verdict against New Delhi.

The oil and gas company is trying to prove that Air India is the “alter ego” of the Indian government, and therefore “jointly.” “It’s responsible for India’s debts,” a move that could pave the way for US marshals to hijack aircraft carriers. It even hired lawyer Denis Hranitzky, who in 2012 to capture an Argentine naval ship In Ghana, as part of the “Long Buenos Aires” battle of Elliott Capital Management, a US hedge fund.

It was the Cairn Award Compiled by the International Tribunal in December in the Netherlands. If implemented, it could generate nice returns for Cairn shareholders և revitalize a business that has been lagging behind for years, forcing it to seize property, cut staff, and limit investment.

But five months later, the government of Indian Prime Minister Narendra Modi did not show any plans to pay.

The case is one of the few cases involving Western companies in New Delhi. Vodafone also became Involved in the mess With the Indian tax authorities, who demanded a repayment of 3 billion euros.

This comes at a sensitive time in the UK-India relationship. Countries last month outlined “2030. Road Map” Strengthen ties in areas such as trade և defense. London hopes to begin negotiations on a full-fledged trade agreement this fall.

The fight is based on 2012. A law that allows New Delhi to levy retroactive taxes on cross-border transactions based on assets located in India.

In 2014, Cairn was barred from selling its remaining 10 percent stake in the former subsidiary Cairn India as authorities launched a tax investigation. The next year it was slapped $ 1.6 billion tax bill,

Cairn has filed for a UK-India bilateral investment agreement to recover his tax claim and claim financial damages. Most of its remaining shares in Cairn India, which later merged with Vedanta, were sold by the Indian tax authorities.

John Onson did not mention the dispute during a call with Modi last month. The UK is of the opinion that it is not involved in the litigation of the investor state, to which it is not a party, although people familiar with it say that previous administrations have discussed the Cairn case.

“We can not be in a situation where Boris John Onson can not stand up for the interests of British companies. “Only in the hope that it can pave the way for a future trade deal,” said Emily Thornbury, the shadow trade secretary for labor.

The Scottish Government has stated that it will ensure that “Scotland ‘s other economic interests are made clear to the UK Government before any further discussion of the Free Trade Agreement with the Government of India”.

Cairn, who has identified $ 70 billion in Indian assets in the world that can be pursued, says it remains “open to continuing a constructive dialogue with the Government of India.”

International arbitration experts suggest that other Indian-owned assets, such as shares, bank accounts, may be an easier target, and the maneuver against Air India, which the Modi government is trying to privatize, was designed to maximize impact.

“They are trying to find a solution,” said one international arbitration lawyer who described Cairn’s actions as “aggressive.”

New Delhi-based lawyer Satvik Varma says Cairn has few options because Indian courts do not recognize international arbitration awards under bilateral investment agreements. “Cairn is responsible to its shareholders, and after being awarded, it must do everything possible to enforce it,” he said.

One of the top 15 shareholders of Cairn said: “It’s a lot of money. At the end of the day, you may have to be aggressive. ”

Treasury Secretary Rasmi Ranjan Dass told the Financial Times that New Delhi was still in dialogue with Cairn. He said “the government is open to a friendly settlement”, but it should be “within the legal framework of India”. “The government’s position is that this is the tax. “, a sovereign function.”

He noted that Cairn was still involved in tax disputes in India. And he said Air India is a legally independent entity that “bears no liability for the payment of amounts due to the Kern Arbitration Award or any other alleged debts or liabilities of India.”

Cairn said she was “absolutely confident” of her position.

Cairn car in Senegal

Execution of a verdict by a tribunal in the Netherlands could bring good returns to Cairn shareholders և Boost business

Lawyers suggest that the next logical step would be for India to apply to New York to “suspend” the Air India case before the Hague tribunal’s case is challenged.

The tax battle caused great damage to Cairn, whose shares were worth more than ֆ 8 in 2012, when India introduced the retroactive concept, but now sells for about 5 165. 2014 և 2020

In addition to staff reductions and asset sales during the first years of the dispute, observers say the uncertainty surrounding the award limits the ability to compete for Cairn assets. The size is more and more important for independent oil and gas companies, which are out of fashion with the stock markets.

“Everyone knows that [London-listed] Harbor Energy and Energean րանք these: [larger independent oil and gas companies] “They will be winners because they will be big enough for investors to take care of themselves,” said Nathan Piper, an Investec analyst.

Cairn “has been trying to run the business since 2015.” “But they really could not go to it because of the uncertainty or not because of earning $ 1 billion.”

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