Inter-Ministerial Group to frame India's response to Cairn's suit against Air India

In the wake of British oil company Cairn Energy Plc suing Air India in order to make the government pay up an arbitration award of $1.2 billion plus interest, sources on May 15 said that the government has engaged a counsel team which is ready to defend against any enforcement action by Cairn anywhere in the world.

They also said that so far, neither the Centre nor Air India had received any notice regarding the case filed by Cairn in the US District Court for the Southern District of New York.

Once the notice is received, an existing high-level Inter-Ministerial Group will decide India's response and the next step to be taken by the sovereign and Air India, a senior official told Moneycontrol.

The IMG comprises senior officials from the Finance Ministry's departments of Economic Affairs and Revenue, and from the External Affairs and Law ministries.

"The government or Air India have not received a notice. As and when any such notice is received, we shall take all necessary steps to defend against any such illegal enforcement action," sources said.

"The government has also engaged a counsel team which is ready to defend against any enforcement action if and when initiated by Cairn anywhere in the world," they said.

Cairn Energy had warned last month that regarding the controversial tax dispute case it won against India, it had already initiated the process of seizing Indian assets abroad. The case against Air India is part of that process.

In December 2020, a Permanent Court of Arbitration at The Hague had ruled that the Indian government should pay damages worth $1.2 billion to Cairn Energy, since a case of retrospective tax was wrongly applied on the company.

In late March, India had already filed an appeal against the arbitration decision. New Delhi will seek a stay on enforcement of the award filed by Cairn in a lower Dutch court and will also contest the enforcement in at least eight other jurisdictions, including the UK, Canada, the US, and France.

"It may be mentioned that government has challenged the award in the case of Cairn in the appropriate court in the Hague, and is confident that the award will be set aside," the sources quoted above said.