Govt ready to defend ‘illegal’ enforcement action if pursued by Cairn: Sources

New Delhi: Union Finance and Corporate Affairs Minister Nirmala Sitharaman addresses at the inauguration of the 6th World Congress on Rural and Agricultural Finance jointly organised by the National Bank for Agriculture and Rural Development (NABARD), Asia-Pacific Rural and Agricultural Credit Association (APRACA) and Government of India, in New Delhi on Nov 12, 2019. (Photo: IANS/PIB)

New Delhi, May 15 (IANS) Government and other public sector undertakings have not received any notice from courts in US and other countries for attachment of any property in pursuance to UK-based energy major Cairn Energy Plc. plea to recover $ 1.2 billion from India being the value of shares that it held in Indian entity which were later sold by the tax department.

Cairn Energy 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 Rs 10,247 crore 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.

Cairn had said it can recover it dues from the Indian government by seizing its assets in other parts of the globe if the same is not duly paid to it with interest.

Sources said that Government or any of the PSUs have not received any such notice from courts of Cairn and when any such notice is received, Government and the concerned organisation shall take all necessary steps to defend against any such “illegal” enforcement action.

It may be mentioned that the government has challenged the award in the case of Cairn in the appropriate court in the Hague and the Centre is confident that the award will be set aside as government’s sovereign right to tax cannot be challenged .

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, said the sources.

Cairn plans to bring lawsuits in the coming weeks for enforcing the Bancec guidelines. These guidelines deal with determining when a judgment against a foreign state is enforceable against its agencies.

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