French court lets Britain’s Cairn Energy seize 20 Indian assets in Paris

New Delhi, July 8

A French court has reportedly allowed Britain’s Cairn Energy to seize 20 Indian Government properties in Paris to recover an arbitration award of $1.7 billion (over Rs 12,600 crore) even as the Finance Ministry here said it had not received any notice in this regard and was trying to ascertain facts.

The French court had agreed to an application by Cairn to seize the residential real estate owned by India in central Paris. The legal formalities were completed on Wednesday, said French media reports.

The Finance Ministry suggested that a dialogue was on with the company’s representatives. “Constructive discussions have been held and the government remains open to an amicable solution to the dispute within the country’s legal framework,” said a ministry statement.

Row over tax

In January 2014, Cairn received Rs10,247 crore tax demand notice over group’s reorganisation done in 2006

The government claimed Cairn made a capital gain of Rs24,503 crore in the process

Cairn launched an international arbitration to challenge the retrospective taxation

It was awarded Rs8,800 cr plus costs in damages from govt

The centrally located properties mostly comprise flats worth over 20 million Euros used to accommodate visiting VIPs in France, according to the French media. “Whenever such an order is received, appropriate legal remedies will be taken in consultation with our counsels,” said the statement.

Cairn had received a notice from the Income Tax Department in January 2014, raising a preliminary assessment of Rs 10,247 crore tax liabilities for the group reorganisation it had done in 2006.

In March 2015, the IT department contended that Cairn made a capital gain of Rs 24,503 crore. Cairn challenged the move before an arbitration tribunal in The Hague, which awarded it $1.2 billion plus costs and interest, which totals $1.7 billion.— TNS