Cairn sues AI to recover $1.2 bn retro tax award

Scottish explorer Cairn Energy Plc has sued lossmaking Air-India in a US court to force recovery of a $1.2 billion international arbitration award it won in December against the Indian government’s retrospective tax claim, a move that could bog down privatisation of the state-run national carrier.

Cairn filed the lawsuit in the US district court for the Southern District of New York, asking Air-India to be declared as the “alter ego of Indian government” by virtue of control and “legally indistinct from the state-itself” as a state-owned company, agency reports said.

The petition also argued for Air India to be “held jointly and severally responsible for India’s debts, including from any judgment resulting from recognition of the (arbitration) award.”

“Cairn is taking the necessary legal steps to protect shareholders’ interests in the absence of a resolution to the arbitral award. Cairn remains open to continuing constructive dialogue with the Government of India to arrive at a satisfactory outcome to this long-running issue,” a Cairn spokesperson said.

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