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retroactive tax law: No likely impact of Cairn and Devas lawsuits on its Air India’s disinvestment process: Govt

Indian Airlines is a separate corporate entity with its own board of directors and board of directors, thus having “no ability to influence” de-investment process due to the lawsuits of Energy and Devas Multimedia in court of the United States, Secretary of State for Civil Aviation VK Singh said on Thursday. Cairn Energy and Devas Multimedia, respectively, are seeking $1.725 billion and $1.2 billion — which they won in international arbitrations — from India.

“Cairn Energy and Devas Multimedia have filed a lawsuit with the United States Southern District Court seeking sentencing and money against Air India Limited as an alternative self of the Republic of India,” Singh said in a statement. Question answer sheet in Lok Sabha.

He said it was “not likely to have any effect” on Air India Limited’s ongoing divestment as it is a separate corporate entity with its own board and board of directors.

“The case is being defended by Air India Limited. The company has appointed a lawyer to protect its interests,” Singh said.

Meanwhile, in a reply to another question in the Lok Sabha, Singh said financial bids for Air India from qualified interested bidders are likely to be received on 15 May. 9 years now.

The center started the divestment process for Air India in January last year.

In May of this year, Cairn Energy brought a case to the Southern District Court of New York United States on the grounds that Air India is so controlled by the Indian government that they “changed the ego” and the airline responsible for the arbitral award about 1.725 billion USD.

The Scottish company invested in the oil and gas sector in India in 1994 and a decade later the company discovered a huge oilfield in Rajasthan. In 2006, it listed its Indian property on the BSE.

Five years later, the government passed a retroactive tax law and billed Rs 10,247 Cairn plus interest and penalties for reorganization associated with the flotation.

The state then expropriated and liquidated Cairn’s remaining shares in the Indian company, seizing dividends and withholding tax refunds to recover part of the demand.

Cairn challenged the move before an arbitration panel in The Hague, which in December awarded it $1.2 billion (over Rs 8,800) plus costs and interest, totaling $1,725 ​​billion (12,600 Rs) as of December 2020.

The company, which previously said the ruling was binding and enforceable under international treaty law, has since sought payment from Indian government officials.

But the government has not yet agreed to the payment.

On October 27 of last year, a US court ordered Antrix Corporation, commercial branch of the Indian Space Research Organization (ISRO), to pay $1.2 billion in compensation to a Bengaluru-based startup, Devas Multimedia, for canceling a satellite deal in 2005.

Under the agreement in January 2005, Antrix agreed to build, launch and operate two satellites and provide 70 MHz of S-band spectrum to Devas, which was later intended to be used to provide satellite services. hybrid and terrestrial communications across India.

The Agreement was terminated by Antrix in February 2011. In June 2011, Devas commenced arbitration proceedings under the Arbitration Rules of the International Chamber of Commerce.

In September 2015, the arbitral tribunal ordered the commercial arm of ISRO to pay $672 million.

By his order of October 27, 2020, Judge Thomas S Zilly, U.S. District Judge, Western District of Washington, Seattle, ruled that Antrix Corporation must pay $562.5 million to Devas Multimedia Corporation and interest rates involved amount to a total of $1.2 billion.

https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/no-likely-impact-of-cairn-and-devas-lawsuits-on-its-air-indias-disinvestment-process-govt/articleshow/84643695.cms | retroactive tax law: No likely impact of Cairn and Devas lawsuits on its Air India’s disinvestment process: Govt

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