Britain’s Cairn files case in U.S. to push India to pay $1.2 bln award
Cairn Energy has filed a case in a U.S. district court to enforce a $1.2 billion arbitration award it won in a tax dispute against India, a court document showed, ratcheting up pressure on the government to pay its dues. In December, an arbitration body awarded the British firm damages of more than $1.2 billion plus interest and costs. The tribunal ruled India breached an investment treaty with Britain and said New Delhi was liable to pay. Cairn asked the U.S. court to recognise and confirm the award, including payments due since 2014 and interest compounded semi-annually, according to the Feb. 12 filing seen by Reuters. The case marked a first step in Cairn’s efforts towards recovering its dues, potentially by seizing Indian assets, if the government did not pay, a source with knowledge of the arbitration case told Reuters. “If Cairn wins the case, it will be a step towards attaching and seizing Indian assets overseas, especially in the U.S.,” the source said. Reuters reported last month that Cairn was identifying India’s overseas assets, including bank accounts and even Air India planes or Indian ships, that could be seized in the absence of a settlement. Cairn declined to comment but pointed to a Feb. 9 Twitter post where it said Chief Executive Simon Thomson was looking forward to meeting India’s Finance Minister in Delhi next week. “We would request, along with others, that the Indian government move swiftly to adhere to the award that has been given,” Thomson said in the video posted on Twitter by Cairn. “It is important for our shareholders who are global financial institutions and who want to see a positive investment climate in India. I am sure that in working together with the government we can swiftly draw this to conclusion and reassure those investors,” he said. India’s finance and external affairs ministries did not immediately respond to requests for comment. Cairn aims to enforce the award under international arbitration rules, commonly called the New York Convention, and recover losses caused by India’s “unfair and inequitable treatment of their investments”, the court filing showed. The company has registered its claim against India in the Netherlands and France, telling regulators in the two countries that they may receive court orders to seize of some Indian assets, and the firm was preparing to do the same in Canada and United States, Reuters reported last month. India lost another major international arbitration case last year against Vodafone over a $2 billion retrospective tax dispute. The government has challenged the arbitration verdict in the Vodafone case. It has yet to say how it will proceed in Cairn’s case where it has to make a significant payment.
Record high pump prices hit India’s gasoline, gasoil sales in Feb
Indian state refiners’ gasoline sales in the first two weeks of February fell below pre-pandemic levels, the first decline in about six months, preliminary industry data showed, as record high retail prices hit consumption. Diesel sales, which are related closely to economic growth and account for about 40 per cent of overall refined fuel sales in India, fell by 8.6 per cent in the first half of February, the largest decline since August last year, the data showed. Gasoline and gasoil prices in India have risen to a record high, mirroring global markets. Taxes account for about 61 per cent of retail gasoline prices and about 56 per cent of diesel prices. State fuel retailers sold 1.03 million tonnes of gasoline and 2.84 million tonnes of diesel from Feb. 1-15, the data provided by an industry source showed. “Definitely sales of petrol and diesel have declined in the last few days. People are feeling the pinch of high oil prices,” said Ajay Bansal, president of the All India Petroleum Dealers Association. State companies – Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum – own about 90 per cent of India’s retail fuel outlets. “First area where the customers vent their anger or show their grievance is the petrol pump to our staff and we have been seeing it,” Bansal said. Rising diesel and petrol prices could push up inflation, making it harder for the Reserve Bank of India (RBI) to continue its accommodative monetary policy. “Pump prices of petrol and diesel have reached historical highs. An unwinding of taxes on petroleum products by both the centre and the states could ease the cost push pressures,” the RBI said in its policy document earlier this month. State retailers sold 1.2 million tonnes of liquefied petroleum gas in the first half of this month, 5.4 per cent higher than last year, while jet fuel sales declined by 41.3 per cent as curbs on air travel remained in place, the data showed.