The asset could be pledged against recourse or non-recourse financing
Cairn Energy Plc on Tuesday said preparatory identification of assets belonging to the Indian government has begun in multiple countries. The company will go to court to seize the assets if its arbitration award is not honoured. The company could also monetize the award, with the potential to transfer it to third-party funds.
It said the arbitration award, which stood at $1.7 billion ($1.2 billion-plus interest currently totalling $490 million), was enforceable against India-owned assets in over 160 countries that have signed and ratified the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the company said in a presentation after announcing results on Tuesday.
“Cairn has already taken steps to have the award recognized in certain major jurisdictions in which Indian sovereign assets have been identified. We have to register the award in various countries before thinking of taking the next step, which would be to go to court with an application to seize the assets belonging to the Indian government,” said a person close to the development.
Cairn said the company has identified items/assets that belong to the Indian government, should it need to take action to protect the interests of its shareholders who have been waiting seven years for clarity on this issue.
The asset could be pledged against recourse or non-recourse financing. It said direct discussions on settlement mechanisms with the Indian government were underway, even through diplomatic channels. The award, it said, was enforceable in more than 160 jurisdictions under the 1958 New York Convention.
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